hedging the Value at Risk is zero and the bank chooses to over-hedge. …

Using a two-moment decision model this paper analyzes corporate hedging behavior in the presence of unified and …, therefore, the incentive for hedging reduces. We demonstrate that pure hedging is differently affected by taxation than … speculative hedging is. Analysing tax-sensitivity of the corporate hedge shows that a higher risk in the first place may reduce …

uncertainty and hedging opportunities. Market transparency is modeled by means of the informational content of publicly observable …