Risk Exposure and Hedging
Bodily, Samuel E.; Fiedler, Lee
QA-0595 | Published September 10, 2002 | 11 pages. Case
Collection: Darden School of Business
Product Details
The concept of exposure, or uncertainty that matters, is developed as the target of hedging. Then, how to hedge that exposure--in particular, how to use regression analysis to obtain a hedging ratio--is described. The note concludes with a discussion of hedging multiple uncertainties and how to use correlations in developing a hedging strategy.
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