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forward hedging and vertical integration are two separate mechanisms for demand and spot price risk diversification that both … forward hedging when retailers are highly risk averse. We illustrate our analysis with data from the French electricity market. …
Persistent link: https://www.econbiz.de/10008925710
. Moreover, it proposes an application of the strategy in hedging against a price drop of the underlying asset to a future date … in a way which enables hedging with zero cost. We have found a profit function, as well as a function of income from a … hedged position in the analytical form, which simplifies the application in particular hedging. …
Persistent link: https://www.econbiz.de/10008670475
Many firms face product price risk in foreign currency, uncertain costs in home currency and exchange rate risk. If prices and exchange rates in different countries interact, natural hedges of foreign exchange risk might result. If the effectiveness of such hedges depends on the hedge horizon,...
Persistent link: https://www.econbiz.de/10008683758
producers have hedging demands for commodity futures. Increases in producers' hedging demand or speculators' capital constraints … increase hedging costs via price-pressure on futures. These in turn affect producers' equilibrium hedging and supply decision … 2010. The component of the commodity futures risk premium associated with producer hedging demand rises when speculative …
Persistent link: https://www.econbiz.de/10010678703
bank deposits, a proxy for access to finance. Overall, this article illuminates the relation between hedging and real firm …
Persistent link: https://www.econbiz.de/10010678709
paper explains the mechanism of such a derivatives use to the hedging of weather risks. The research methodology is the past …
Persistent link: https://www.econbiz.de/10010679428
Hedging transaction and translation exposures to exchange rate changes may increase the economic exposure of the firm … and reduce the information value of firms' quarterly statements. In this paper hedging macroeconomic exposures, of which … measured, choice of strategy for managing exposures, and choice of financial instruments for hedging different exposures. …
Persistent link: https://www.econbiz.de/10010684465
hedging behaviour, and provides empirical evidence on a potential differentiation of determinants of derivative use over time …
Persistent link: https://www.econbiz.de/10010658835
. The goal of hedging against interest rate risk is only achieved in full if the present value of this spread is zero. Using … market data we show that under a traditional IRS hedging strategy an investor could still experience significant cash flow … portfolio that allows for general changes in interest rates. We make two contributions. The paper analyzes the size of hedging …
Persistent link: https://www.econbiz.de/10008472652
Hedging being a predominant financial concern, is considered as a robust method of managing investment risks …. Literature evinces that the covered call strategy provides nominal returns alongside effective hedging. However, studies have not … compared the hedging effectiveness of covered call, covered put, collar, and synthetic long call strategies in the equity …
Persistent link: https://www.econbiz.de/10015074048