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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 …'s welfare in terms of the expected inter-temporal utility of consumption. …
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To explain the strategic dimension in pricing options, it will be helpful to go back to the heart of the idea behind the concept of an option: options open up the possibility to postpone current decisions to a future point of time. Because of this flexibility additional information and new...
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, the introduction of futures markets is beneficial in that employment is increased as output is enhanced …
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This paper empirically analyzes the impact of exchange rate uncertainty, exchange rate movements and expectations on foreign direct investment (FDI). Two competing specifications of exchange rate volatility are examined. The investigation is based on a cross-section time-series data set of U.S....
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