Purpose – This paper aims to provide a comprehensive empirical assessment of major contemporary corporate hedging theories, i.e. financial theory, agency theory, stakeholder theory and new institutional economics. Design/methodology/approach – Hypotheses regarding the determinants of hedging...

Purpose – The objectives of this paper are to: define business risk; identify whether economic capital could be used to mitigate this risk; and investigate business‐risk measurement methodologies. Design/methodology/approach – The paper analyzes definitions used in theory and practice and...

Purpose – The paper seeks to examine whether or not wealth effects and changes in the systematic risk associated with the return structure of the Greek commercial chartered banks, investment firms and insurance companies resulted from the passage of the European Union Banking Directives over...

Purpose – The purpose of this paper is to show that the duration‐based hedge ratio has many serious defects: first, the yield‐to‐maturity is not the market interest rate, and it cannot even serve as a proxy for the market interest rate. Second, it is difficult to choose an appropriate...

Purpose – This paper considers a Sparre Andersen risk process for which the claims inter‐arrival distribution is Generalized Exponential. The purpose of this paper is to find explicit expressions for the moments of time to ruin when a penalty is imposed at ruin. Design/methodology/approach...

Purpose – One of the agency conflicts between investors and managers in fund management is reflected by risk‐taking behaviors led by their different goals. The investors may stop their investments in risky assets before the end of the investment horizon to minimize risk, while the managers...

Purpose – The purpose of this paper is to find the optimal hedging strategy when an investor has budget constraints on both the initial capital and the future cash flow. Design/methodology/approach – The paper follows the utility minimization of the total cost, using convex utility functions...

Purpose – In this two‐part series, this paper seeks to consider certain intriguing aspects of randomness, the basic mathematical concept used to model financial risk and other unknown quantities in the physical world. Design/methodology/approach – Part 1 applies concepts from quantum...

Purpose – This paper aims to provide a review of techniques that support risk management in product development projects using the concurrent engineering (CE) philosophy. Design/methodology/approach – The Australia/New Zealand risk management standard AS/NZS 4360:1999 proposes a generic...

Purpose – The purpose of this research is to examine the degree to which the UAE banks use risk management practices and techniques in dealing with different types of risk. The secondary objective is to compare risk management practices between the two sets of banks....