The electric power sector, which accounts for approximately 40% of U.S. carbon dioxide emissions, will be a critical component of any policy the U.S. government pursues to confront climate change. In the context of uncertainty in future policy limiting emissions and future technology costs, society faces the following question: What should the electricity mix we build in the next decade look li...

Small states have three strategic options when they are confronted by a rising power: balancing, bandwagoning, and hedging. With an increasingly powerful assertive China as its neighbour, Taiwan, small state, is in such conundrum. Employing survey data collected during the past two decades, this study examines how Taipei’s cross-Strait policy has been closely associated with public’s preference...

This paper investigates corporate hedging activities in the Australian gold mining industry. We find that the Australian companies in 1997 are more actively involved in gold derivative markets than their counterparts in North America in 1993. This may suggest a general risk-averse attitude among the Australian managers when comparing with the North American managers. We also find that corporate...

This paper considers the multiperiod hedging decision in a framework of mean-reverting spot prices and unbiased futures markets. The task is to determine the optimal hedging path, i.e., the sequence of positions in futures contracts with the objective of minimizing the variance of an uncertain future cash flow. The model is used to illustrate both hedging using a matchedmaturity futures contrac...

Basis = price of hedged asset-price of hedging instrument problem of basis risk: uncertainties of processes describing the evolution of prices of asset and hedging instrument not identical, only highly correlated Example 1: weather derivatives hedged asset: heating oil sales, hedging instrument: HDD derivative HDD derivative: contract paying a premium in case HDD above a critical threshold Exam...

ABSTRACT In this paper, under constraint of delta-strategy and by importing another related risky asset to compose a hedging portfolio comprising the underlying asset and riskless asset(the Bond). Firstly, we excellently devise a dynamic hedging program for contingent claims; and then, according to Principle of Dynamic Programming and by taking advantage of backward recursion technique, at each...

Hedging on a company aims to protect the from foreign exchange’s exposure. The population in this study is mining sectors listed Indonesian Stock Exchange period 2014-2019. Sampel selection technique purposive sampling methods . Based criteria that have been determined, accuired 8 companies sampel. type of data used annual financial report each website and stock closing price investing.com. Dat...

This paper investigated the hedging effectiveness of crude palm oil futures market in Malaysia from January 2009 to June 2011 which traded under Bursa Malaysia Derivatives Berhad. Ordinary Least Squared (OLS) method was used to compute Minimum-Variance hedging ratio (MVHR), R-squared and hedging effectiveness by using daily data from settlement price of crude palm oil futures contracts and spot...

In this study, optimal operation of a reservoir by incorporation the hedging policy and Bat Algorithm (BA) is investigated. The deficit in water supply dam minimized as objective function monthly releases from are determined compared three hedging-based rules. first rule, which has single decision variable, constant release considered for all 240 months period. second scenario, one fixed each m...

This paper mainly discusses the American option’s hedging strategies via binomial model and the basic idea of pricing and hedging American option. Although the essential scheme of hedging is almost the same as European option, small differences may arise when simulating the process for American option holder has more rights, spelling that the option can be exercised at anytime before its maturi...