This paper analyzes the optimal production and hedging decisions of a competitive firm holding optimism and pessimism … on the output price distribution nor on the firm's preferences. Furthermore, the validity of the full-hedging theorem … the firm's optimism level above which it is never optimal for the firm to full-hedge even when an unbiased hedging …

Firms commonly engage in a practice known as ‘selective hedging', i.e. adjusting the timing and size of hedging … hedging using hand-collected data from the oil and gas industry. The most robust finding is that selective hedging increases … confident. Another set of findings suggests over-confidence, however, since selective hedging is associated with lower realized …

distress costs and the foreign currency hedging decision and more significantly the foreign currency only hedging decision … the fact that several U.S. studies include in their non-hedging sample other hedging firms, such as firms using non …-derivative methods for currency hedging and interest rate only hedgers, which might bias the results against the a priori expectations …

process. We find that all regime switching based hedging strategies significantly outperform single regime hedging strategies … hedging performance. Our results indicate that risk managers using state-dependent hedge ratios to manage portfolio risks in … carbon emission markets will achieve superior hedging returns …

A key question is why many multinational firms forgo foreign exchange derivative (FX) hedging and instead use … operational hedging. We propose an explanation based on illiquidity and the unique advantages of operational hedges. We use 10-K …

put options, and if they finance these hedging positions with cash-on-hand or by selling upside (call options). Using hand …-collected data on derivative portfolios we characterize hedging strategies in the oil and gas industry. Our main findings are that … the likelihood of being a hedger increases with CEO age, and that near-retirement CEOs prefer linear hedging instruments …

derivative hedging are partial substitutes in smoothing earnings before 1999. In this study, we investigate whether FAS 133 … S&P 500 non-financial firms during 1996-2006, we find that the substitution relation between derivative hedging and … volatility associated with derivative hedging post-FAS 133. These results are robust to the use of various model and method …

We analyze hedging strategies that minimize tail risk measured by Value-at-Risk (VaR) or Conditional …-Value-at-Risk (CVaR). In particular, we derive first-order conditions characterizing VaR- and CVaR-minimal hedging with futures in regime …-switching models. Using cross-hedging examples, we theoretically and empirically demonstrate that tail-risk-minimal strategies can …