Tag Archives: Hedging

Schrand and Unal – Hedging & Coordinated Risk Management

Schrand and Unal – Hedging & Coordinated Risk Management We provide an explanation for hedging as a means of allocating rather than reducing risk. We argue that when increases in total risk are costly, firms optimally allocate risk by reducing (increasing) exposure to risks that provide zero (positive) economic rents. Our evidence shows that mutual…

Schrand and Unal – Hedging & Coordinated Risk Management

Schrand and Unal – Hedging & Coordinated Risk Management We provide an explanation for hedging as a means of allocating rather than reducing risk. We argue that when increases in total risk are costly, firms optimally allocate risk by reducing (increasing) exposure to risks that provide zero (positive) economic rents. Our evidence shows that mutual…