Rochet, Jean-Charles; Villeneuve, Stéphane - In: Journal of Financial Intermediation 20 (2011) 3, pp. 303-323
We analyze the demand for hedging and insurance by a firm facing cash-flow risks. We study how the firm's liquidity management policy interacts with two types of risk: a Brownian risk that can be hedged through a financial derivative, and a Poisson risk that can be insured by an insurance...