Journal articles: 'Selective hedging'

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Jankensgård. "Does Managerial Power Increase Selective Hedging? Evidence from the Oil and Gas Industry." Journal of Risk and Financial Management 12, no. 2 (April 24, 2019): 71. http://dx.doi.org/10.3390/jrfm12020071.

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This study examines the managerial power-hypothesis of selective hedging, which holds that selective hedging is observed more frequently in companies where managers have greater latitude to execute hedging proposals without serious scrutiny or questioning. The hypothesis is tested using hand-collected data on corporate governance and derivative positions from the oil and gas industry. The results support the view that managerial power increases selective hedging. The main governance dimension associated with selective hedging is the extent of inside ownership. Firms with high inside ownership have excessive variability in their derivative portfolios, were more prone to opportunistic behavior following the great rise in the oil price in the mid-2000s, and have lower realized cash flow from hedging.

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Brown, Gregory W., Peter R. Crabb, and David Haushalter. "Are Firms Successful at Selective Hedging?*." Journal of Business 79, no. 6 (November 2006): 2925–49. http://dx.doi.org/10.1086/508004.

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Beltratti, Andrea, Andrea Laurant, and Stavros A. Zenios. "Scenario modelling for selective hedging strategies." Journal of Economic Dynamics and Control 28, no. 5 (February 2004): 955–74. http://dx.doi.org/10.1016/s0165-1889(03)00057-5.

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Yun, Won-Cheol. "Selective hedging strategies for oil stockpiling." Energy Policy 34, no. 18 (December 2006): 3495–504. http://dx.doi.org/10.1016/j.enpol.2005.07.021.

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Won-Cheol, Yun. "Selective foreign exchange hedging for Korean importers." Journal of economic research 22, No. 1 (2017): 47–62.

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Knill, April, Kristina Minnick, and Ali Nejadmalayeri. "Selective Hedging, Information Asymmetry, and Futures Prices*." Journal of Business 79, no. 3 (May 2006): 1475–501. http://dx.doi.org/10.1086/500682.

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Sanda, Gaute Egeland, Eirik Tandberg Olsen, and Stein-Erik Fleten. "Selective hedging in hydro-based electricity companies." Energy Economics 40 (November 2013): 326–38. http://dx.doi.org/10.1016/j.eneco.2013.06.018.

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Eun, Cheol S., and Bruce G. Resnick. "International equity investment with selective hedging strategies." Journal of International Financial Markets, Institutions and Money 7, no. 1 (April 1997): 21–42. http://dx.doi.org/10.1016/s1042-4431(97)00009-7.

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Worley, Ray E. "Effects of Hedging and Selective Limb Pruning of Elliott, Desirable, and Farley Pecan Trees under Three Irrigation Regimes." Journal of the American Society for Horticultural Science 110, no. 1 (January 1985): 12–16. http://dx.doi.org/10.21273/jashs.110.1.12.

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Abstract Twenty-year-old ‘Elliott’, ‘Desirable’, and ‘Farley’ trees were pruned over, an 8-year period using: 1) pruning on only low and broken limbs, 2) removal of competing wood from alternating temporary trees, 3) top and side hedging, and 4) selective limb pruning. Wood removal from temporary trees was low, except for the last two years of the study, and little difference in yield and quality from the control was obtained. Top and side hedging reduced overall yield of ‘Desirable’ and ‘Farley’ and it changed the alternate bearing phase of ‘Elliott’ so that yields were increased and decreased in alternating years. Selective limb pruning increased yield of ‘Desirable’ in one year but, overall, gave no significant yield changes from the control. Selective limb pruning increased ‘Elliott’ yield in some years and reduced it in others to give an overall reduction in yield. Selective limb pruning did not reduce yield of ‘Farley’ significantly. Selective limb pruning usually increased nut size, and pruning effects on quality were erratic. Both hedging and selective limb pruning usually increased terminal growth. Most parameters measured showed significant cultivar × year × irrigation × pruning interactions.

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Kiss, Gábor Dávid, Marianna Sávai, and Beáta Udvari. "Missing Data Bias on a Selective Hedging Strategy." Journal of Competitiveness 9, no. 1 (March 31, 2017): 5–19. http://dx.doi.org/10.7441/joc.2017.01.01.

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Fabling, Richard, and Arthur Grimes. "Over the Hedge: Do Exporters Practice Selective Hedging?" Journal of Futures Markets 35, no. 4 (September 26, 2014): 321–38. http://dx.doi.org/10.1002/fut.21692.

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Zhong, Qiankun, Seth Frey, and Martin Hilbert. "Quantifying the Selective, Stochastic, and Complementary Drivers of Institutional Evolution in Online Communities." Entropy 24, no. 9 (August 25, 2022): 1185. http://dx.doi.org/10.3390/e24091185.

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Institutions and cultures usually evolve in response to environmental incentives. However, sometimes institutional change occurs due to stochastic drivers beyond current fitness, including drift, path dependency, blind imitation, and complementary cooperation in fluctuating environments. Disentangling the selective and stochastic components of social system change enables us to identify the key features of long-term organizational development. Evolutionary approaches provide organizational science with abundant theories to demonstrate organizational evolution by tracking beneficial or harmful features. In this study, focusing on 20,000 Minecraft communities, we measure these drivers empirically using two of the most widely applied evolutionary models: the Price equation and the bet-hedging model. As a result, we find strong selection pressure on administrative and information rules, suggesting that their positive correlation with community fitness is the main reason for their frequency change. We also find that stochastic drivers decrease the average frequency of administrative rules. The result makes sense when viewed in the context of evolutionary bet-hedging. We show through the bet-hedging result that institutional diversity contributes to the growth and stability of rules related to information, communication, and economic behaviors.

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Albouy, Michel, and Philippe Dupuy. "Selective Hedging of Foreign Exchange Risk: New Evidence from French Non-Financial Firms." Management international 21, no. 4 (October 31, 2018): 76–88. http://dx.doi.org/10.7202/1053579ar.

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We provide survey evidence on the use of derivatives for the management of foreign exchange risk among French non-financial firms. We focus particularly on the way firms might alter the size and the timing of the hedges, a practice called selective hedging. We rely on observations gathered between 2010 and 2015 via e-mail surveys and one-on-one interviews. The results show that French corporations are hedging more systematically than their foreign counterparts. Together, we observe that highly indebted and smaller firms tend to be more selective. We relate our findings to cultural differences and communication issues.

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Topaloglou, Nikolas, Hercules Vladimirou, and Stavros A. Zenios. "CVaR models with selective hedging for international asset allocation." Journal of Banking & Finance 26, no. 7 (July 2002): 1535–61. http://dx.doi.org/10.1016/s0378-4266(02)00289-3.

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Alam, Nafis, and Amit Gupta. "Does hedging enhance firm value in good and bad times." International Journal of Accounting & Information Management 26, no. 1 (March 5, 2018): 132–52. http://dx.doi.org/10.1108/ijaim-03-2017-0041.

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Purpose The purpose of this paper is to examine if the hedging strategy of the firm adds value to the firm, and if so, is the source of the benefit consistent with the hedging theory? Design/methodology/approach The paper used data from 129 top non-financial Indian companies spanning a period of 2008-2015 and analyzed using the ordinary least squares regression technique. Findings The study finds that firms engaged in hedging compared to non-hedgers have less volatility in the firm’s value. The use of hedging during the financial crisis is found to be value enhancing for the hedgers. The results also found that some firms do not disclose the notional value of derivatives clearly, which highlights the need of clear regulation for derivative declaration in the annual reports. Research limitations/implications Research implications of this study are to gain an insight into the hedging effectiveness in the highly volatile Indian market as compared to developed countries. High volatility in the exchange rate of Indian rupee further makes it one of the most relevant markets to study the effect of hedging on the firm’s value. Practical implications Mostly hedging is done purely for risk management, and if managers try to time the market by selective hedging, it can bring a negative impact for the firm. Findings show that managers should manage their hedging strategy based on changing the economic environment and not purely on the firms’ financial value. Originality/value To the authors’ best knowledge, this is the first study to extract the dollar value of derivative usage of sample firms and analyze its effectiveness in enhancing firm value in the presence of other financial parameters. This will be an advancement of previous studies, which used hedging as a dummy variable only. Most studies on this topic are carried out in developed countries; there is a limited research on developing markets such as India, and past studies have been more generic one like determinants of hedging and overall derivative scenario.

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Wojakowski, Rafał M. "How should firms selectively hedge? Resolving the selective hedging puzzle." Journal of Corporate Finance 18, no. 3 (June 2012): 560–69. http://dx.doi.org/10.1016/j.jcorpfin.2012.02.003.

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Zamzamir@Zamzamin, Zaminor, Razali Haron, Zatul Karamah Ahmad Baharul Ulum, and Anwar Hasan Abdullah Othman. "Non-linear relationship between foreign currency derivatives and firm value: evidence on Sharīʿah compliant firms." Islamic Economic Studies 28, no. 2 (May 21, 2021): 156–73. http://dx.doi.org/10.1108/ies-09-2020-0036.

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PurposeThis study examines the impact of hedging on firm value of Sharīʿah compliant firms (SCFs) in a non-linear framework.Design/methodology/approachThis study employs the system-GMM for dynamic panel data to examine the influence of derivatives usage on firm value (Tobin's Q, ROA and ROE). The sample comprised of 59 non-financial SCFs engaged in derivatives from 2000 to 2017 (18 years). The Sasabuchi-Lind-Mehlum (SLM) test for U-shaped is performed to confirm the existence of the non-linear relationship.FindingsThis study concludes that hedging significantly contributes to firm value of SCFs based on the non-linear framework. This study suggests that, first, the non-linear relationship occurs due to the different degree of derivatives usage and risk. Second, firms practice selective hedging to maintain the upside potential of firm value.Research limitations/implicationsThis study has important implications. First, the importance of risk management via derivatives to increase firm value, second, the evidence of selective hedging from the non-linear relationship between derivatives and firm value and third, the need for quality reporting on derivatives engagement by firms in line with the required accounting standard on derivatives.Originality/valueThis study fills the gap in the literature in relation to the risk management strategies of SCFs in three aspects. First, re-examines the relationship using recent data. Second, examines the relationship in the non-linear framework as the limited studies found in the literature on Malaysian firms are only based on linear relationship. Third, determines whether hedging undertaken by firms is optimal as this can only be addressed using the non-linear framework. This study is robust to the various definitions of firm value (Tobin's Q, ROA and ROE) and non-linear methodologies.

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Luiz Rossi, José. "Hedging, selective hedging, or speculation? Evidence of the use of derivatives by Brazilian firms during the financial crisis." Journal of Multinational Financial Management 23, no. 5 (December 2013): 415–33. http://dx.doi.org/10.1016/j.mulfin.2013.08.004.

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Schroeder, Ted C., and Marvin L. Hayenga. "Comparison of selective hedging and options strategies in cattle feedlot risk management." Journal of Futures Markets 8, no. 2 (April 1988): 141–56. http://dx.doi.org/10.1002/fut.3990080203.

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Grant, Susan Jung, and Ying Xie. "Hedging Your Bets and Assessing the Outcome." Journal of Marketing Research 44, no. 3 (August 2007): 516–24. http://dx.doi.org/10.1509/jmkr.44.3.516.

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Hedging offsets the risk of an existing stake by counterbalancing it with a new stake—for example, complementing a bet on the race favorite with another bet on a promising upstart. In three experiments, the authors find that rather than assessing the hedge as a whole, people tend to react to the hedging outcome by focusing on either the original stake or the new one. The authors show that the hedger's focus is linked to a psychological motivation of whether to pursue safety and security by minimizing losses, known as a “prevention orientation,” or to pursue growth and advancement by maximizing gains, known as a “promotion orientation.” When the context is gambling, prevention-oriented people fixate on what happens to the status quo stake, whereas promotion-oriented people attend to the new stake (Experiment 1). The same conclusion emerges from a stock-investing context (Experiments 2a and 2b). Moreover, because selective attention to status quo and change is the mechanism at work, the authors find that a choice between options characterized as maintaining the status quo elicits greater discrimination among prevention-oriented than promotion-oriented people; similarly, a choice between options characterized as initiating change elicits greater discrimination among promotion-oriented than prevention-oriented people (Experiment 3). These effects drive behavioral intentions.

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Lalancette, Simon, Frank Leclerc, and David Turcotte. "Selective hedging with market views and risk limits: the case of Hydro-Quebec." Quarterly Review of Economics and Finance 44, no. 5 (December 2004): 710–26. http://dx.doi.org/10.1016/j.qref.2004.02.001.

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Adam, Tim R., Chitru S. Fernando, and Jesus M. Salas. "Why do firms engage in selective hedging? Evidence from the gold mining industry." Journal of Banking & Finance 77 (April 2017): 269–82. http://dx.doi.org/10.1016/j.jbankfin.2015.05.006.

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Poulos, Helen, Andrew Barton, Jasper Slingsby, and David Bowman. "Do Mixed Fire Regimes Shape Plant Flammability and Post-Fire Recovery Strategies?" Fire 1, no. 3 (October 22, 2018): 39. http://dx.doi.org/10.3390/fire1030039.

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The development of frameworks for better-understanding ecological syndromes and putative evolutionary strategies of plant adaptation to fire has recently received a flurry of attention, including a new model hypothesizing that plants have diverged into three different plant flammability strategies due to natural selection. We provide three case studies of pyromes/taxa (Pinus, the Proteaceae of the Cape Floristic Region, and Eucalyptus) that, contrary to model assumptions, reveal that plant species often exhibit traits of more than one of these flammability and post-fire recovery strategies. We propose that such multiple-strategy adaptations have been favoured as bet-hedging strategies in response to selective pressure from mixed-fire regimes experienced by these species over evolutionary time.

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Kozlowski, Jan, and Stephen C. Stearns. "Hypotheses for the Production of Excess Zygotes: Models of Bet-Hedging and Selective Abortion." Evolution 43, no. 7 (November 1989): 1369. http://dx.doi.org/10.2307/2409453.

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Kozlowski, Jan, and Stephen C. Stearns. "HYPOTHESES FOR THE PRODUCTION OF EXCESS ZYGOTES: MODELS OF BET-HEDGING AND SELECTIVE ABORTION." Evolution 43, no. 7 (November 1989): 1369–77. http://dx.doi.org/10.1111/j.1558-5646.1989.tb02588.x.

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Libby, Eric, and Paul B. Rainey. "Exclusion rules, bottlenecks and the evolution of stochastic phenotype switching." Proceedings of the Royal Society B: Biological Sciences 278, no. 1724 (April 13, 2011): 3574–83. http://dx.doi.org/10.1098/rspb.2011.0146.

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Stochastic phenotype switching—often considered a bet hedging or risk-reducing strategy—can enhance the probability of survival in fluctuating environments. A recent experiment provided direct evidence for an adaptive origin by showing the de novo evolution of switching in bacterial populations propagated under a selective regime that captured essential features of the host immune response. The regime involved strong frequency-dependent selection realized via dual imposition of an exclusion rule and population bottleneck. Applied at the point of transfer between environments, the phenotype common in the current environment was assigned a fitness of zero and was thus excluded from participating in the next round (the exclusion rule). In addition, also at the point of transfer, and so as to found the next bout of selection, a single phenotypically distinct type was selected at random from among the survivors (the bottleneck). Motivated by this experiment, we develop a mathematical model to explore the broader significance of key features of the selective regime. Through a combination of analytical and numerical results, we show that exclusion rules and population bottlenecks act in tandem as potent selective agents for stochastic phenotype switching, such that even when initially rare, and when switching engenders a cost in Malthusian fitness, organisms with the capacity to switch can invade non-switching populations and replace non-switching types. Simulations demonstrate the robustness of our findings to alterations in switching rate, fidelity of exclusion, bottleneck size, duration of environmental state and growth rate. We also demonstrate the relevance of our model to a range of biological scenarios such as bacterial persistence and the evolution of sex.

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Coppa, Crescenzo, Luca Sorrentino, Monica Civera, Marco Minneci, Francesca Vasile, and Sara Sattin. "New Chemotypes for the Inhibition of (p)ppGpp Synthesis in the Quest for New Antimicrobial Compounds." Molecules 27, no. 10 (May 12, 2022): 3097. http://dx.doi.org/10.3390/molecules27103097.

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Antimicrobial resistance (AMR) poses a serious threat to our society from both the medical and economic point of view, while the antibiotic discovery pipeline has been dwindling over the last decades. Targeting non-essential bacterial pathways, such as those leading to antibiotic persistence, a bacterial bet-hedging strategy, will lead to new molecular entities displaying low selective pressure, thereby reducing the insurgence of AMR. Here, we describe a way to target (p)ppGpp (guanosine tetra- or penta-phosphate) signaling, a non-essential pathway involved in the formation of persisters, with a structure-based approach. A superfamily of enzymes called RSH (RelA/SpoT Homolog) regulates the intracellular levels of this alarmone. We virtually screened several fragment libraries against the (p)ppGpp synthetase domain of our RSH chosen model RelSeq, selected three main chemotypes, and measured their interaction with RelSeq by thermal shift assay and STD-NMR. Most of the tested fragments are selective for the synthetase domain, allowing us to select the aminobenzoic acid scaffold as a hit for lead development.

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Martins, Rogério Parentoni, Rosana Tidon, and José Alexandre Felizola Diniz-Filho. "The evolutionary ecology of interactive synchronism: the illusion of the optimal phenotype." European Journal of Ecology 3, no. 2 (August 1, 2016): 107–15. http://dx.doi.org/10.1515/eje-2017-0018.

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AbstractIn this article, we discuss some ecological-evolutionary strategies that allow synchronization of organisms, resources, and conditions. Survival and reproduction require synchronization of life cycles of organisms with favourable environmental and ecological features and conditions. This interactive synchronization can occur directly, through pairwise or diffuse co-evolution, or indirectly, for example, as a result of actions of ecosystem engineers and facilitator species. Observations of specific interactions, especially those which have coevolved, may give the false impression that evolution results in optimal genotypes or phenotypes. However, some phenotypes may arise under evolutionary constraints, such as simultaneous evolution of multiple traits, lack of a chain of fit transitional forms leading to an optimal phenotype, or by limits inherent in the process of selection, set by the number of selective deaths and by interference between linked variants. Although there are no optimal phenotypes, optimization models applied to particular species may be useful for a better understanding of the nature of adaptations. The evolution of adaptive strategies results in variable life histories. These strategies can minimize adverse impacts on the fitness of extreme or severe environmental conditions on survival and reproduction, and may include reproductive strategies such as semelparity and iteroparity, or morphological, physiological, or behavioural traits such as diapause, seasonal polyphenism, migration, or bet-hedging. However, natural selection cannot indefinitely maintain intra-population variation, and lack of variation can ultimately extinguish populations.

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Giraudeau, Mathieu, Tuul Sepp, Beata Ujvari, François Renaud, Aurélie Tasiemski, Benjamin Roche, Jean-Pascal Capp, and Frédéric Thomas. "Differences in mutational processes and intra-tumour heterogeneity between organs." Evolution, Medicine, and Public Health 2019, no. 1 (January 1, 2019): 139–46. http://dx.doi.org/10.1093/emph/eoz017.

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Abstract Extensive diversity (genetic, cytogenetic, epigenetic and phenotypic) exists within and between tumours, but reasons behind these variations, as well as their consistent hierarchical pattern between organs, are poorly understood at the moment. We argue that these phenomena are, at least partially, explainable by the evolutionary ecology of organs’ theory, in the same way that environmental adversity shapes mutation rates and level of polymorphism in organisms. Organs in organisms can be considered as specialized ecosystems that are, for ecological and evolutionary reasons, more or less efficient at suppressing tumours. When a malignancy does arise in an organ applying strong selection pressure on tumours, its constituent cells are expected to display a large range of possible surviving strategies, from hyper mutator phenotypes relying on bet-hedging to persist (high mutation rates and high diversity), to few poorly variable variants that become invisible to natural defences. In contrast, when tumour suppression is weaker, selective pressure favouring extreme surviving strategies is relaxed, and tumours are moderately variable as a result. We provide a comprehensive overview of this hypothesis. Lay summary: Different levels of mutations and intra-tumour heterogeneity have been observed between cancer types and organs. Anti-cancer defences are unequal between our organs. We propose that mostly aggressive neoplasms (i.e. higher mutational and ITH levels), succeed in emerging and developing in organs with strong defences.

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Botero, Carlos A., Franz J. Weissing, Jonathan Wright, and Dustin R. Rubenstein. "Evolutionary tipping points in the capacity to adapt to environmental change." Proceedings of the National Academy of Sciences 112, no. 1 (November 24, 2014): 184–89. http://dx.doi.org/10.1073/pnas.1408589111.

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In an era of rapid climate change, there is a pressing need to understand how organisms will cope with faster and less predictable variation in environmental conditions. Here we develop a unifying model that predicts evolutionary responses to environmentally driven fluctuating selection and use this theoretical framework to explore the potential consequences of altered environmental cycles. We first show that the parameter space determined by different combinations of predictability and timescale of environmental variation is partitioned into distinct regions where a single mode of response (reversible phenotypic plasticity, irreversible phenotypic plasticity, bet-hedging, or adaptive tracking) has a clear selective advantage over all others. We then demonstrate that, although significant environmental changes within these regions can be accommodated by evolution, most changes that involve transitions between regions result in rapid population collapse and often extinction. Thus, the boundaries between response mode regions in our model correspond to evolutionary tipping points, where even minor changes in environmental parameters can have dramatic and disproportionate consequences on population viability. Finally, we discuss how different life histories and genetic architectures may influence the location of tipping points in parameter space and the likelihood of extinction during such transitions. These insights can help identify and address some of the cryptic threats to natural populations that are likely to result from any natural or human-induced change in environmental conditions. They also demonstrate the potential value of evolutionary thinking in the study of global climate change.

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Ruiz, José L., and Elena Gómez-Díaz. "The second life of Plasmodium in the mosquito host: gene regulation on the move." Briefings in Functional Genomics 18, no. 5 (May 6, 2019): 313–57. http://dx.doi.org/10.1093/bfgp/elz007.

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Abstract Malaria parasites face dynamically changing environments and strong selective constraints within human and mosquito hosts. To survive such hostile and shifting conditions, Plasmodium switches transcriptional programs during development and has evolved mechanisms to adjust its phenotype through heterogeneous patterns of gene expression. In vitro studies on culture-adapted isolates have served to set the link between chromatin structure and functional gene expression. Yet, experimental evidence is limited to certain stages of the parasite in the vertebrate, i.e. blood, while the precise mechanisms underlying the dynamic regulatory landscapes during development and in the adaptation to within-host conditions remain poorly understood. In this review, we discuss available data on transcriptional and epigenetic regulation in Plasmodium mosquito stages in the context of sporogonic development and phenotypic variation, including both bet-hedging and environmentally triggered direct transcriptional responses. With this, we advocate the mosquito offers an in vivo biological model to investigate the regulatory networks, transcription factors and chromatin-modifying enzymes and their modes of interaction with regulatory sequences, which might be responsible for the plasticity of the Plasmodium genome that dictates stage- and cell type-specific blueprints of gene expression.

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McFadyen, Lisa, David Robertson, Margaret Sedgley, Paul Kristiansen, and Trevor Olesen. "Production Trends in Mature Macadamia Orchards and the Effects of Selective Limb Removal, Side-hedging, and Topping on Yield, Nut Characteristics, Tree Size, and Economics." HortTechnology 23, no. 1 (February 2013): 64–73. http://dx.doi.org/10.21273/horttech.23.1.64.

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Yields of macadamia (Macadamia integrifolia, M. tetraphylla, and hybrids) orchards tend to increase with increasing tree size up to ≈94% light interception. Beyond this, there is some indication that crowding leads to yield decline, but the evidence is limited to one site. Increasing tree size and orchard crowding also present numerous management problems, including soil erosion, harvest delays, and increased pest and disease pressure. The aim of this study was to better characterize long-term yield trends in mature orchards and to assess the effects of manual and mechanical pruning strategies on yield, nut characteristics, tree size, and economics. We monitored yield at four sites in mature ‘344’ and ‘246’ orchards for up to seven years and confirmed a decline in yield with crowding for three of the sites. There was a small increase in yield over time at the fourth site, which may reflect the lower initial level of crowding and shorter monitoring period compared with the other sites, and highlights the need for long-term records to establish yield trends. Pruning to remove several large limbs from ‘246’ trees to improve light penetration into the canopy increased yield relative to control trees but the effect was short-lived and not cost-effective. Removal of a codominant leader from ‘344’ trees reduced yield by 21%. Annual side-hedging of ‘246’ trees reduced yield by 12% and mechanical topping of ‘344’ trees caused a substantial reduction in yield of up to 50%. Removal of limbs in the upper canopy to reduce the height of ‘344’ trees had less effect on yield than topping but re-pruning was not practical because of the extensive regrowth around the pruning cuts. Tree size control is necessary for efficient orchard management, but in this study, pruning strategies that controlled tree size also reduced yield. Research into the physiological response to pruning in macadamia is required to improve outcomes.

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Parra-Tabla, Victor, and Stephen H. Bullock. "Factors limiting fecundity of the tropical tree Ipomoea wolcottiana (Convolvulaceae) in a Mexican tropical dry forest." Journal of Tropical Ecology 14, no. 5 (September 1998): 615–27. http://dx.doi.org/10.1017/s0266467498000431.

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To explain very low fruit production in the tropical tree Ipomoea wolcottiana (Convolvulaceae), experiments and observations are presented regarding hypotheses that fecundity is limited by foliar herbivory, low soil phosphorus, inadequate cross-pollination, low rates of pollinator visitors, and parasitism of flower buds. A 2 × 2 factorial experiment was undertaken in two consecutive years which included control of herbivores with contact and systemic insecticides and addition of phosphorus. Phosphorus application in the second year increased the number of inflorescences and flowers by 200%, and the initiation of fruits by 400%. No response was observed for the number of mature fruits. Herbivore control and the addition of phosphorus increased seed weight by 22% in the first year, but could not be measured in the second year. Hand-pollination experiments increased the fruit set by 58% in the first year and by 75% in the second. Observations on visits to the flowers showed a six-fold difference between years in rates of pollinator visits. Parasitism of flower buds was 18% in the first year and 33% in the second. Several of the differences between years probably resulted from lesser and desynchronized flowering, due to heavy unseasonal rains in the second year. The differences in floral visitation and predation of floral buds were reflected in open fruit production: 16% in the first year and 6% in the second. All the factors investigated have important effects on the fecundity of I. wolcottiana. From the evolutionary point of view, the results suggest a complex interaction among selective forces which interact with the reproductive system. The theories of sexual selection and bet-hedging are the most plausible alternatives for explaining high levels of floral abortion in this species.

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Brighetti, Gianni, Caterina Lucarelli, and Nicoletta Marinelli. "Do emotions affect insurance demand?" Review of Behavioral Finance 6, no. 2 (November 4, 2014): 136–54. http://dx.doi.org/10.1108/rbf-04-2014-0027.

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Purpose – The purpose of this paper is to explore how psychological variables are related to real-life insurance consumption. Specifically, the authors focus on whether emotions and psychological traits can improve the predictability of insurance demand, taking traditional socioeconomic variables under control. Design/methodology/approach – The approach used was in-person survey, based on a traditional questionnaire, the Barratt Impulsiveness Scale and a psycho-physiological task (Iowa Gambling Task (IGT)). Findings – A selective role of emotions and psychological traits has been proven to exist when comparing different insurance policies. Life and casualty insurance are affected by emotional arousal to losses; indemnity insurance by fear of the unknown, whereas health insurance by impulsivity. Research limitations/implications – The findings indicate that individual insurance consumption may be amplified by not cognitive components. Future research should concentrate on testing the effect of further psychological traits related to pure risk coverage. Practical implications – The results may be of interest for insurers in order to know what drives insurance demand with respect to different kinds of pure risks. Social implications – For policymakers, it is important to understand how psychological factors affect consumer behavior in order to incorporate such perspective into modern insurance policy measures. An analysis of such factors may also increase the self-consciousness of insurance consumers and enrich consumer self-protection. Originality/value – The authors propose an interdisciplinary approach to analyze insurance demand and test different kinds of insurance coverage, suggesting not homogenous hedging behaviors in relation to specific ambiguous events.

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Janulczyk, Robert, Vega Masignani, Domenico Maione, Hervé Tettelin, Guido Grandi, and John L. Telford. "Simple Sequence Repeats and Genome Plasticity in Streptococcus agalactiae." Journal of Bacteriology 192, no. 15 (May 21, 2010): 3990–4000. http://dx.doi.org/10.1128/jb.01465-09.

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ABSTRACT Simple sequence repeats (SSRs) and their role in phase variation have been extensively studied in Gram-negative organisms, where they have been associated with antigenic variation and other adaptation strategies. In this study, we apply comparative genomics in order to find evidence of slipped-strand mispairing in the human Gram-positive pathogen Streptococcus agalactiae. In two consecutive screenings, 2,233 (650 + 1,583) SSRs were identified in our reference genome 2603V/R, and these loci were examined in seven other S. agalactiae genomes. A total of 56 SSR loci were found to exhibit variation, where gain or loss of repeat units was observed in at least one other genome, resulting in aberrant genotypes. Homopolymeric adenine tracts predominated among the repeats that varied. Positional analysis revealed that long polyadenine tracts were overrepresented in the 5′ ends of open reading frames (ORFs) and underrepresented in the 3′ ends. Repeat clustering in ORFs was also examined, and the highest degree of clustering was observed for a capsule biosynthesis gene and a pilus sortase. A statistical analysis of observed over expected ratios suggested a selective pressure against long homopolymeric tracts. Altered phenotypes were verified for three genes encoding surface-attached proteins, in which frameshifts or fusions led to truncation of proteins and/or affected surface localization through loss or gain of the cell wall sorting signal. The data suggest that SSRs contributes to genome plasticity in S. agalactiae but that the bet-hedging strategy is different from Gram-negative organisms.

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Simons, Andrew M. "Modes of response to environmental change and the elusive empirical evidence for bet hedging." Proceedings of the Royal Society B: Biological Sciences 278, no. 1712 (March 16, 2011): 1601–9. http://dx.doi.org/10.1098/rspb.2011.0176.

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Uncertainty is a problem not only in human decision-making, but is a prevalent quality of natural environments and thus requires evolutionary response. Unpredictable natural selection is expected to result in the evolution of bet-hedging strategies, which are adaptations to long-term fluctuating selection. Despite a recent surge of interest in bet hedging, its study remains mired in conceptual and practical difficulties, compounded by confusion over what constitutes evidence for its existence. Here, I attempt to resolve misunderstandings about bet hedging and its relationship with other modes of response to environmental change, identify the challenges inherent to its study and assess the state of existing empirical evidence. The variety and distribution of plausible bet-hedging traits found across 16 phyla in over 100 studies suggest their ubiquity. Thus, bet hedging should be considered a specific mode of response to environmental change. However, the distribution of bet-hedging studies across evidence categories—defined according to potential strength—is heavily skewed towards weaker categories, underscoring the need for direct appraisals of the adaptive significance of putative bet-hedging traits in nature.

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Hoelscher, Seth A. "Voluntary hedging disclosure and corporate governance." Review of Accounting and Finance 19, no. 1 (June 10, 2019): 5–29. http://dx.doi.org/10.1108/raf-01-2018-0001.

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Purpose This paper aims to investigate the implications of governance quality on a firm’s information environment in the context of voluntary changes in hedging disclosures made by oil and gas companies. Design/methodology/approach The research utilizes a Factiva-guided search to hand-collect public disclosures related to changes in hedging policies along with the hand collection of financial derivatives positions and operational hedging contracts data using 10-K filings. The paper addresses self-selection bias, which typically plagues voluntary disclosure studies, by implementing a Heckman (1979) two-step model to estimate the decision process, make changes in their hedge program and, conditional on making changes to their hedging activities, provide disclosure. Findings Oil and gas firms with relatively poor governance are more likely to voluntarily disclose hedging changes and do so more frequently (substitution hypothesis). There is evidence that poorly governed firms in the presence of large shareholders (i.e. high institutional ownership) are more likely to provide transparency of hedging policy changes. Originality/value This is the first study to combine hand-collected changes in hedging voluntary disclosures and hand-collected derivative position data to investigate the interaction of corporate governance and voluntary disclosure. The sample allows for analysis between three sub-samples: companies that do not make changes in hedging and do not hedge, firms that make changes in their hedging policies but do not disclose the changes during a given year and companies that change their hedging activities and provide voluntary disclosure. This unique setting helps to alleviate concerns of self-selection bias associated with voluntary disclosure.

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Bhatia, Nikhil, Roshan Srivastav, and Kasthrirengan Srinivasan. "Season-Dependent Hedging Policies for Reservoir Operation—A Comparison Study." Water 10, no. 10 (September 22, 2018): 1311. http://dx.doi.org/10.3390/w10101311.

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During periods of significant water shortage or when drought is impending, it is customary to implement some kind of water supply reduction measures with a view to prevent the occurrence of severe shortages (vulnerability) in the near future. In the case of operation of a water supply reservoir, this reduction of water supply is affected by hedging schemes or hedging policies. This research work aims to compare the popular hedging policies: (i) linear two-point hedging; (ii) modified two-point hedging; and, (iii) discrete hedging based on time-varying and constant hedging parameters. A parameterization-simulation-optimization (PSO) framework is employed for the selection of the parameters of the compromising hedging policies. The multi-objective evolutionary search-based technique (Non-dominated Sorting based Genetic Algorithm-II) was used to identify the Pareto-optimal front of hedging policies that seek to obtain the trade-off between shortage ratio and vulnerability. The case example used for illustration is the Hemavathy reservoir in Karnataka, India. It is observed that the Pareto-optimal front that was obtained from time-varying hedging policies show significant improvement in reservoir performance when compared to constant hedging policies. The variation in the monthly parameters of the time-variant hedging policies shows a strong correlation with monthly inflows and available water.

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Hixon, Mark A., Darren W. Johnson, and Susan M. Sogard. "BOFFFFs: on the importance of conserving old-growth age structure in fishery populations." ICES Journal of Marine Science 71, no. 8 (December 29, 2013): 2171–85. http://dx.doi.org/10.1093/icesjms/fst200.

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Abstract The value of big old fat fecund female fish (BOFFFFs) in fostering stock productivity and stability has long been underappreciated by conventional fisheries science and management, although Hjort (1914) indirectly alluded to the importance of maternal effects. Compared with smaller mature females, BOFFFFs in a broad variety of marine and freshwater teleosts produce far more and often larger eggs that may develop into larvae that grow faster and withstand starvation better. As (if not more) importantly, BOFFFFs in batch-spawning species tend to have earlier and longer spawning seasons and may spawn in different locations than smaller females. Such features indicate that BOFFFFs are major agents of bet-hedging strategies that help to ensure individual reproductive success in environments that vary tremendously in time and space. Even if all else were equal, BOFFFFs can outlive periods that are unfavourable for successful reproduction and be ready to spawn profusely and enhance recruitment when favourable conditions return (the storage effect). Fishing differentially removes BOFFFFs, typically resulting in severe truncation of the size and age structure of the population. In the worst cases, fishing mortality acts as a powerful selective agent that inhibits reversal of size and age truncation, even if fishing intensity is later reduced. Age truncation is now known to destabilize fished populations, increasing their susceptibility to collapse. Although some fisheries models are beginning to incorporate maternal and other old-growth effects, most continue to treat all spawning-stock biomass as identical: many small young females are assumed to contribute the same to stock productivity as an equivalent mass of BOFFFFs. A growing body of knowledge dictates that fisheries productivity and stability would be enhanced if management conserved old-growth age structure in fished stocks, be it by limiting exploitation rates, by implementing slot limits, or by establishing marine reserves, which are now known to seed surrounding fished areas via larval dispersal. Networks of marine reserves are likely to be the most effective means of ensuring that pockets of old-growth age structure survive throughout the geographic range of demersal species.

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Simons, Andrew M. "Fluctuating natural selection accounts for the evolution of diversification bet hedging." Proceedings of the Royal Society B: Biological Sciences 276, no. 1664 (March 4, 2009): 1987–92. http://dx.doi.org/10.1098/rspb.2008.1920.

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Natural environments are characterized by unpredictability over all time scales. This stochasticity is expected on theoretical grounds to result in the evolution of ‘bet-hedging’ traits that maximize the long term, or geometric mean fitness even though such traits do not maximize fitness over shorter time scales. The geometric mean principle is thus central to our interpretation of optimality and adaptation; however, quantitative empirical support for bet hedging is lacking. Here, I report a quantitative test using the timing of seed germination—a model diversification bet-hedging trait—in Lobelia inflata under field conditions. In a phenotypic manipulation study, I find the magnitude of fluctuating selection acting on seed germination timing—across 70 intervals throughout five seasons—to be extreme: fitness functions for survival are complex and multimodal within seasons and significantly dissimilar among seasons. I confirm that the observed magnitude of fluctuating selection is sufficient to account for the degree of diversification behaviour characteristic of individuals of this species. The geometric mean principle has been known to economic theory for over two centuries; this study now provides a quantitative test of optimality of a bet-hedging trait in nature.

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Balasooriya, Uditha, Johnny Siu-Hang Li, and Jackie Li. "The Impact of Model Uncertainty on Index-Based Longevity Hedging and Measurement of Longevity Basis Risk." Risks 8, no. 3 (August 1, 2020): 80. http://dx.doi.org/10.3390/risks8030080.

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We investigate the impact of model uncertainty on hedging longevity risk with index-based derivatives and assessing longevity basis risk, which arises from the mismatch between the hedging instruments and the portfolio being hedged. We apply the bivariate Lee–Carter model, the common factor model, and the M7-M5 model, with separate cohort effects between the two populations, and various time series processes and simulation methods, to build index-based longevity hedges and measure the hedge effectiveness. Based on our modeling and simulations on hypothetical scenarios, the estimated levels of hedge effectiveness are around 50% to 80% for a large pension plan, and the model selection, particularly in dealing with the computed time series, plays a very important role in the estimation. We also experiment with a modified bootstrapping approach to incorporate the uncertainty of model selection into the modeling of longevity basis risk. The hedging results under this approach may approximately be seen as a “weighted” average of those calculated from the different model candidates.

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Santoso, Gabriela, and Dyna Rachmawati. "Peranan Keputusan Hedging dalam Hubungan Risiko Nilai Tukar Rupiah dan Growth Opportunity terhadap Profitabilitas." E-Jurnal Akuntansi 31, no. 10 (October 27, 2021): 2649. http://dx.doi.org/10.24843/eja.2021.v31.i10.p19.

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This study aims to examine and analyze the effect of the risk of rupiah exchange rate and growth opportunity on profitability with hedging decisions as moderating variables. The risk of rupiah exchange rate is measured by exchange rate exposure, growth opportunity is measured by comparing MVE and BVE, and hedging decisions are measured by the dummy method, and profitability by net profti margin. The object of research used is manufacturing companies listed on the IDX during 2017-2019 periods. The sample selection used purposive sampling. Data analysis used linear regression analysis technique and MRA. The results showed that the risk of rupiah exchange rate had no effect on profitability, hedging decisions reduced the negative effect of the risk of rupiah exchange rate on profitability, and growth opportunity had a positive effect on profitability. Keywords: Risk of Rupiah Exhange Rate; Growth Opportunity; Profitability; Hedging Decisions.

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BROLL, UDO, B. MICHAEL GILROY, and ELMAR LUKAS. "MANAGING CREDIT RISK WITH CREDIT DERIVATIVES." Annals of Financial Economics 03, no. 01 (June 2007): 0750004. http://dx.doi.org/10.1142/s2010495207500042.

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Credit risk is one of the most important forms of risk faced by national and international banks as financial intermediaries. Managing this kind of risk through selecting and monitoring corporate and sovereign borrowers and through creating a diversified loan portfolio has always been one of the predominant challenges in bank management. The aim of our study is to examine how a risky loan portfolio affects optimal bank behavior in the loan and deposit markets, when derivatives to hedge credit risk are available. In a stochastic continuous-time framework a hedging model is developed where the bank management can use derivatives to hedge credit risk. Optimal loan, deposit and hedging strategies are then studied. It is shown that the magnitude and the direction of hedging are determined by the bank manager's preferences, the corresponding risk premium and the variance of the loan rate and its hedging instrument respectively.

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Garcia-Gonzalez, Francisco, Yukio Yasui, and Jonathan P. Evans. "Mating portfolios: bet-hedging, sexual selection and female multiple mating." Proceedings of the Royal Society B: Biological Sciences 282, no. 1798 (January 7, 2015): 20141525. http://dx.doi.org/10.1098/rspb.2014.1525.

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Polyandry (female multiple mating) has profound evolutionary and ecological implications. Despite considerable work devoted to understanding why females mate multiply, we currently lack convincing empirical evidence to explain the adaptive value of polyandry. Here, we provide a direct test of the controversial idea that bet-hedging functions as a risk-spreading strategy that yields multi-generational fitness benefits to polyandrous females. Unfortunately, testing this hypothesis is far from trivial, and the empirical comparison of the across-generations fitness payoffs of a polyandrous (bet hedger) versus a monandrous (non-bet hedger) strategy has never been accomplished because of numerous experimental constraints presented by most ‘model’ species. In this study, we take advantage of the extraordinary tractability and versatility of a marine broadcast spawning invertebrate to overcome these challenges. We are able to simulate multi-generational (geometric mean) fitness among individual females assigned simultaneously to a polyandrous and monandrous mating strategy. Our approaches, which separate and account for the effects of sexual selection and pure bet-hedging scenarios, reveal that bet-hedging, in addition to sexual selection, can enhance evolutionary fitness in multiply mated females. In addition to offering a tractable experimental approach for addressing bet-hedging theory, our study provides key insights into the evolutionary ecology of sexual interactions.

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Haaland, Thomas R., Jonathan Wright, and Irja I. Ratikainen. "Bet-hedging across generations can affect the evolution of variance-sensitive strategies within generations." Proceedings of the Royal Society B: Biological Sciences 286, no. 1916 (November 27, 2019): 20192070. http://dx.doi.org/10.1098/rspb.2019.2070.

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In order to understand how organisms cope with ongoing changes in environmental variability, it is necessary to consider multiple adaptations to environmental uncertainty on different time scales. Conservative bet-hedging (CBH) represents a long-term genotype-level strategy maximizing lineage geometric mean fitness in stochastic environments by decreasing individual fitness variance, despite also lowering arithmetic mean fitness. Meanwhile, variance-prone (aka risk-prone) strategies produce greater variance in short-term payoffs, because this increases expected arithmetic mean fitness if the relationship between payoffs and fitness is accelerating. Using evolutionary simulation models, we investigate whether selection for such variance-prone strategies is counteracted by selection for bet-hedging that works to adaptively reduce fitness variance. In our model, variance proneness evolves in fine-grained environments (lower correlations among individuals in energetic state and/or payoffs), and with larger numbers of independent decision events over which resources accumulate prior to selection. Conversely, multiplicative fitness accumulation, caused by coarser environmental grain and fewer decision events selection, favours CBH via greater variance aversion. We discuss examples of variance-sensitive strategies in optimal foraging, migration, life histories and cooperative breeding using this bet-hedging perspective. By linking disparate fields of research studying adaptations to variable environments, we should be better able to understand effects of human-induced rapid environmental change.

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Graham, Jeffrey K., Myron L. Smith, and Andrew M. Simons. "Experimental evolution of bet hedging under manipulated environmental uncertainty in Neurospora crassa." Proceedings of the Royal Society B: Biological Sciences 281, no. 1787 (July 22, 2014): 20140706. http://dx.doi.org/10.1098/rspb.2014.0706.

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All organisms are faced with environmental uncertainty. Bet-hedging theory expects unpredictable selection to result in the evolution of traits that maximize the geometric-mean fitness even though such traits appear to be detrimental over the shorter term. Despite the centrality of fitness measures to evolutionary analysis, no direct test of the geometric-mean fitness principle exists. Here, we directly distinguish between predictions of competing fitness maximization principles by testing Cohen's 1966 classic bet-hedging model using the fungus Neurospora crassa . The simple prediction is that propagule dormancy will evolve in proportion to the frequency of ‘bad’ years, whereas the prediction of the alternative arithmetic-mean principle is the evolution of zero dormancy as long as the expectation of a bad year is less than 0.5. Ascospore dormancy fraction in N. crassa was allowed to evolve under five experimental selection regimes that differed in the frequency of unpredictable ‘bad years’. Results were consistent with bet-hedging theory: final dormancy fraction in 12 genetic lineages across 88 independently evolving samples was proportional to the frequency of bad years, and evolved both upwards and downwards as predicted from a range of starting dormancy fractions. These findings suggest that selection results in adaptation to variable rather than to expected environments.

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Ratnaningsih, Ratih, Destian Arshad Darulmalshah Tamara, and Ine Mayasari. "Pengaruh Likuiditas, Leverage, Profitabilitas, Firm Size dan Growth Opportunity terhadap Hedging Sektor Farmasi, Industri Dasar dan Bahan Kimia pada Perusahaan ISSI." Journal of Applied Islamic Economics and Finance 2, no. 1 (October 31, 2021): 227–37. http://dx.doi.org/10.35313/jaief.v2i1.3049.

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Pharmaceutical sector companies as well as basic industries and chemicals in Indonesia still depend on imports of medicinal raw materials using foreign currency. Forex fluctuations are unavoidable and one of the risk management for foreign exchange fluctuations is hedging. This study aims to determine and analyze the involvement of Current Ratio representing Liquidity, Debt to Equity Ratio representing Leverage, Ratio On Assets representing Profitability, Firm Size and Growth Opportunity to hedging case studies in Pharmaceutical Sector Companies and Basic and Industrial Industries. Chemicals indexed by the Indonesian Sharia Stock Index on 2015 – 2020. Purposive sampling method used for sample selection and logistic regression analysis. Result on this research, the concluded that in the Pharmaceutical Industry and Basic Industry and Chemicals listed in ISSI for the 2015-2020 period, the variables that affect the hedging decision making are Firm Size and Growth Opportunity

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López, Fernando, and Eduardo Walker. "Investment performance, regulation and incentives: the case of Chilean pension funds." Journal of Pension Economics and Finance 20, no. 1 (January 6, 2020): 125–50. http://dx.doi.org/10.1017/s1474747219000350.

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AbstractWe examine the investment performance of Chilean pension funds during their multi-fund period (2003–17). Using tradable asset class benchmarks, we extend Sharpe's (1992) return-based style analysis by explicitly considering regulatory restrictions and currency hedging. We find that despite the significant differences between pension fund manager returns, they are statistically similar to our style benchmarks for all fund types. Furthermore, accounting for currency hedging improves the accuracy of the replicating portfolios and the selection return estimates. Our results have policy implications for investment regulation of pension systems with similar characteristics to the Chilean one.

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Choe, Myeong Sig. "An Alternative Futures Hedge for Minor Currencies." Journal of Derivatives and Quantitative Studies 12, no. 1 (May 30, 2004): 87–112. http://dx.doi.org/10.1108/jdqs-01-2004-b0005.

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In a world of trade among nations using different currencies, every exchange of goods, services, or assets taking place between economic actors of different nations requires an accompanying currency transaction. If foreign exchange rates were fixed, this would be little more than a formality and not a potential source of market distortion. In the current world, however, the currency exchange rates are often very volatile and can affect market prices when viewed from outside the economy. Individuals with risk-averse preferences seek to minimize the potential losses possible from their currency positions through the use of currency hedging tools. When a nation‘s currency hedging instrument (e.g. a currency futures contract) is traded in liquid market, it is easy to hedge the risk posed by holding a foreign currency position. In these market situations, currency futures contracts can be purchased for hedging the currency position. However, when a nation‘s currency hedging instrument is not traded in liquid markets, it is impossible to hedge the risk by the direct hedging. Hence, a proxy for the currencies of small economies (i.e. minor currencies) must be found. This study examines five nations‘ currencies, the Fiji Dollar, Cyprus Pound, Maltese Lira, Taiwanese Dollar, and South Korea Won in order to determine an effective currency futures hedge for the three minor currencies in the above list : the Fiji Dollar, the Cyprus Pound, and the Maltese Lira. The results of this study‘s tests indicate that multiple futures contract hedge proposed in this study is an appropriate hedging tool for both the Fiji Dollar and the Cyprus Pound. In the case of the Maltese Lira, the results are less conclusive and suggest that the selection of the appropriate futures contracts should be improved.

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Bartram, Söhnke M., and Gordon M. Bodnar. "The exchange rate exposure puzzle." Managerial Finance 33, no. 9 (August 7, 2007): 642–66. http://dx.doi.org/10.1108/03074350710776226.

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PurposeBased on basic financial models and reports in the business press, exchange rate movements are generally believed to affect the value of nonfinancial firms. In contrast, the empirical research on nonfinancial firms typically produces fewer significant exposures estimates than researchers expect, independent of the sample studied and the methodology used, giving rise to a situation known as “the exposure puzzle”. To this end, this paper aims to systematically analyze the existing empirical evidence of the exposure phenomenon and to attempt to understand the possible source of the exposure puzzle.Design/methodology/approachThe paper provides a survey of the existing research on the exposure phenomenon for nonfinancial firms. A simple model of exposure elasticity is also used to demonstrate the substantial impact of operational hedging on exposure elasticities. Furthermore, the evidence on the nature of firms’ financial derivative usage is considered.FindingsIt is suggested that the exposure puzzle may not be a problem of empirical methodology or sample selection as previous research has suggested, but is simply the result of the endogeneity of operative and financial hedging at the firm level. Given that empirical tests estimate exchange exposures net of corporate hedging, both firms with low gross exposures that do not need to hedge and firms with large gross exposures that employ one or several forms of hedging, may exhibit only weak exchange rate exposures net of hedging. Consequently, empirical tests yield only small percentages of firms with significant stock price exposures in almost any sample.Originality/valueIf firms react rationally to their exposures, most firms will either have no exposure to start with, or reduce their exposure to levels that may be too small to detect empirically. Consequently, the exposure puzzle may not be a problem with methodology or theory, but mainly the result of endogeneity of operative and financial hedging at the firm level.

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Journal articles on the topic 'Selective hedging'

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