and inflation risk. Both sources of uncertainty make it difficult to stabilize consumption over time. However, investors …Our study examines the behavior of a risk-averse investor who faces two sources of uncertainty: a random asset price …

This note examines the behavior of a competitive firm that faces joint price and inflation risk. Given that the price … risk is negatively correlated with the inflation risk in the sense of expectation dependence, the firm optimally opts for … inflation risk, it is not the case when the inflation risk prevails. In contrast to the conventional wisdom, forward hedging …