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A Note On The Preferred Hedge Instrument, Arthur Hau
A Note On The Preferred Hedge Instrument, Arthur Hau
Hong Kong Institute of Business Studies Working Paper Series
Contrary to Battermann et al.'s (2000) claims, this paper shows that risk-averse exporters may produce less with fair commodity futures than with fair put options; moreover, they may prefer the latter instrument for hedging against its exchange rate risk.