The failure of risk management for nonfinancial companies in the context of the financial crisis: lessons from Aracruz Celulose and hedging with derivatives

The main contribution of this article is to present hard evidence on hedging strategies and relate it to behavioural and agency problems resulting from speculation with derivatives. We focus on the case of Aracruz Celulose. We show how the real hedge position of Aracruz -- that lost US2.1 billion in currency derivatives -- deviated from its optimal hedge as the result of speculation with Over-the-Counter (OTC) derivatives.

MoreLess

Year of publication:	2013
Authors:	Zeidan, Rodrigo ; Rodrigues, Bruno
Published in:	Applied Financial Economics. - Taylor & Francis Journals, ISSN 0960-3107. - Vol. 23.2013, 3, p. 241-250
Publisher:	Taylor & Francis Journals

More details

Extent:	text/html
Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010618462