This paper examines the production and hedging decisions of the competitive firm under price uncertainty when the firm … difference between the actual profit and the maximum profit attained by making the optimal production and hedging decisions had … aversion, the prevalence of hedging opportunities may have perverse effect on the firm's optimal output level, particularly …

Finance theory does not provide a comprehensive framework for explaining risk management within the imperfect financial … corporate hedging: equity value maximising strategies and strategies determined by managerial risk aversion. The first category … distress and costs of external finance or to replace home-made hedging by shareholders. The second category considers that …