. Optimal consumption and risk management strategies are derived. It is shown that dynamic hedging increases an investor …Our study examines the behavior of a risk-averse investor who faces two sources of uncertainty: a random asset price … and inflation risk. Both sources of uncertainty make it difficult to stabilize consumption over time. However, investors …

Within the prospect theory the paper examines production and hedging decisions of a competitive firm under price …

. For example, the nature of monotonicity of the indifference curve depends on the underlying mean. Price hedging decisions … hedging decisions within the prospect theory. We illustrate our general considerations with a thoroughly worked out example …. -- Prospect theory ; mean-variance model ; indifference curve ; price uncertainty ; hedging …