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 …. Optimal consumption and risk management strategies are derived. It is shown that dynamic hedging increases an investor …

Within the prospect theory the paper examines production and hedging decisions of a competitive firm under price … uncertainty. We consider the prospect theory for the firm's utility function in the two moment model known as (mu … theory, mean-variance model, price uncertainty …

. -- Prospect theory ; mean-variance model ; indifference curve ; price uncertainty ; hedging … hedging decisions within the prospect theory. We illustrate our general considerations with a thoroughly worked out example …The prospect theory is one of the most popular decision-making theories. It is based on the S-shaped utility function …

achieved from the existence of risk sharing markets are the separationtheorem and the and full-hedging theorem. This note … examines the optimalproduction for exports and hedging decisions of a risk-averse rm facing bothhedgeable exchange rate risk … and non-hedgeable (background) risk. While theseparation property holds in this context, the full-hedging property does …