We test the hypothesis that practicing Enterprise Risk Management (ERM) reduces firms' cost of reducing risk. Adoption … contribute most to the total risk of the firm, and optimize the evaluation and selection of available hedging instruments. We … hypothesize that these advantages allow ERM-adopting firms to produce greater risk reduction per dollar spent. Our hypothesis …

This chapter deals with nonparametric estimation of the risk neutral density. We present three different approaches … of the risk neutral density. The first estimator is a kernel smoother of the second derivative of call prices, while the … we assume the existence of a stochastic discount factor (pricing kernel) which establishes the risk neutral density …