Hedging

Following the introduction of the European Union Emissions Trading Scheme, CO2 emissions have become a tradable commodity. As a regulated party, emitters are forced to take into account the additional carbon emissions costs in their production costs structure. Given the high volatility of carbon price, the importance of price risk management becomes unquestioned. This study is the first attempt to calculate hedge ratios and to investigate their hedging effectiveness in the EU-ETS carbon market by applying conventional and recently developed models of estimation. These hedge ratios are then compared with those derived for other markets. In spite of the uniqueness and novelty of the carbon market, the results of the study are consistent with those found in other marketsthat the hedge ratio is in the range of 0.5 to 1.0 and still best estimated by simple regression models.

ABSTRACT This paper attempts to explore an empirical relationship between asset returns and inflation in Pakistan. Using simple Foreign currency, gold, real estate, saving deposits, silver, stock prices, treasury bills, and government securities are considered as asset. To establish the relationship between asset return and inflation the study uses the annual data from 1972 to 2006 using OLS techniques. The empirical results indicate that most of the asset returns are hedged expected inflation. None of the asset returns are hedging unexpected inflation and total inflation. However, the treasury bills and government securities are significant to total and unexpected inflation, but the coefficients are less than one. The stock prices and gold prices neither hedge to total inflation nor expected and unexpected inflation. The reason is that the individuals are used gold for precautionary purpose not for hedging against inflation. For stock prices the reasons may be the people are not interested to invest in risky assets. A matter of fact is that a significant relationship exists between un-expected inflation and assets in various cases but slope coefficients are less than one and therefore are not hedges against inflation. The Pakistani investors are interested in risk free investment and not risky investment.

The master thesis studies the applicability of Black-Scholes-Model extensions to pricing options on stock indices. Polish options on the WIG20 stock index traded on the GPW the provide for the object of the study. The thesis analyses the characteristics of the Polish derivative market and applies stochastic theory to pricing Polish options. The traditional Black-Scholes-Merton model is extended to accommodate various stochastic approaches including Martingale Pricing methods, Fourier Transforms, and Monte-Carlo simulation. The approaches are implemented by means of the Python computer language. The results produced by different pricing methods are compared to the results of the standard Black-Scholes-Merton.

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Source: National Department of Agriculture, 2003:10 In 2002, agricultural co-operatives, which form an integral part of agriculture in South Africa, had assets valued at R6, 7 billion and a net income after tax of R193 million. Chapter 5 provides a summary of the research and conclusions on the use of derivative instruments by co-operatives. Recommendations for future research are also made.

Hedging is transferring of risk from those who want to reduce risk to those who are willing to take the risk. Hedgers are traders who want to reduce risk and speculators are those willing to take the risk. The hedge ratio is defined as the ratio of the size of the position taken in the futures market to the size of the position in the spot market. If such a ratio minimizes the total risk (variance) of the portfolio, then it is said to be optimal. Hedging effectiveness is defined as the ratio of the variance of the unhedged position minus variance of the hedged position over the variance of unhedged position. The study explain this concept by selecting ICICI bank futures. VECM and CCC-MGARCH model is used to analyse time series data.

The main contribution of the paper is to present hard evidence on risk exposure, hedging strategies, and agency problems resulting in speculation with derivatives, by focusing on the case of Aracruz Celulose. It highlights the failure of risk management systems in non-financial firms in the face of extreme events like the financial crisis of 2008. The company posted financial losses of U$2.1 billion due to currency derivatives trading in the third quarter of 2008. We show how the company‟s real hedge position deviated from its optimal hedge as a result of the speculation with OTC derivatives, permitted by weak governance structures that failed in preventing hubris and mistakes in risk management.

Corporate risk management may employ financial or operative means to reduce the exposure to unexpected currency fluctuations. This article utilizes a real options framework to establish that operative hedging through the creation of operational flexibility represents a strategic complement to any variance-minimizing financial hedge. In addition, operational flexibility creates an asymmetric exposure profile and, as a result, alters the composition of the financial hedge portfolio. It alters the number of symmetric hedge contracts employed as well as their contractual rate and provides an economic argument for the use of (exotic) currency options. Operational flexibility acts as a value driver and may therefore be utilized, independent of its usefulness for risk management. The analysis further shows that operative hedging entails an implicit opportunity cost in the form of foregone option value. D

While investing in foreign assets may bring additional benefits in terms of risk diversification, it may also expose the portfolio to a further source of risk derived from changes in the value of the foreign currencies. Hedging strategies for international portfolios have usually focused on the use of forward contracts to mitigate the currency risk. We propose an alternative formulation aimed at the reduction of the overall portfolio risk by assuming the returns are uncertain and maximizing the portfolio return for the worst possible outcome of the returns. This technique known as robust optimization provides a first guarantee on the portfolio value thanks to the non-inferiority property. We further complement our approach with forward contracts on the foreign exchange rates and options on the assets. Because the total return on any asset will be the product of its local return and currency return, the models proposed are bilinear and non convex. A reformulation of both the uncertainty set and the objective function as a semidefinite problem will yield an approximate tractable model. We compare the hedging alternatives proposed with simulated and historical market data and conclude on their relative benefits.

Every international business is affected by the ever-changing value of the currencies implied in contracts. While many of us consider this unpredictability a nuisance, the volatility of currencies around the world can mean the difference between success and failure for many exporters/importers. Exchange rates between one currency and another can change dramatically in a short period of time, leaving the unprepared business exposed to potentially crippling losses. The efficient management of this risk is essential for the survival of a company and any business that is exposed to such a risk should ensure that it is fully prepared to manage it. Old standbys and recent breakthroughs in the area of financial risk management can remove much of the risk from currency rate movements. The range of such products is huge, with increasingly sophisticated techniques constantly being added. Among the most modern methods for managing exchange risk there are four major classes of derivative produc...

We provide a descriptive examination of the trading activities of one of the most important intermediaries in global financial markets—the OTC derivatives dealer. These dealers play a central role in the provision of derivative products and in the intermediation of market risks faced by financial and non-financial firms alike. Utilizing a unique database, we analyze the derivatives holdings of 264 dealers spanning 34 countries over the period 1995-2001. We document the geographic composition of dealers on both country and regional levels as well as analyze trends in dealer holdings on an aggregate and individual product level. We further analyze the extent of global merger activity among dealers and resulting consolidation effects. Finally, we investigate at the individual dealer level the extent and evolution of their array of product offerings.

This paper examined the impact of foreign currency derivatives on firm value using several findings from firms across the world with significant exchange rate exposure. The results show that foreign currency derivatives usage affect firm value positively. The study also revealed that foreign currency derivatives can be used for managers' self-interest, for hedging or for speculative purposes. Furthermore, the study found strong evidence that the use of foreign currency derivatives for firms that have strong internal firm-level or external country-level corporate governance is associated with a significant value premium. The paper therefore emphasizes that investors can appeal to a firm's internal (firm-level) and external (country-level) corporate governance to draw inferences on a firm's motive behind the use of derivatives, since well-governed firms are more likely to use derivatives to hedge rather than to speculate or pursue managers' self-interest.

The paper examines similarities and dierences in the degree of commitment and detachment in English, Bulgarian and Bulgarian English research articles in linguistics. The analysis shows considerable dierences in the overall distribution of hedges and boosters throughout the three main parts of the article, namely the Introduction, Discussion and Conclusion, which may lead to misunderstandings in cross-cultural communication. The particular linguistic devices employed in the three languages are also investigated. Reasons for preference for one or another device are suggested; special attention is paid to certain dierences in the pragmatic function of formally similar items. The variations are related to the dierent rhetorical and educational traditions in order to further facilitate the teaching of academic writing in English to Bulgarians, but also to appeal for a better understanding and tolerance of culture-speci®c features with a view to preserving cultural identity when using English as the international language of academic communication. 7

A price process is scale-invariant if and only if the returns distribution is independent of the price measurement scale. We show that most stochastic processes used for pricing options on financial assets have this property and that many models not previously recognised as scale-invariant are indeed so. We also prove that price hedge ratios for a wide class of contingent claims under a wide class of pricing models are model-free. In particular, previous results on model-free price hedge ratios of vanilla options based on scale-invariant models are extended to any contingent claim with homogeneous pay-off, including complex, path-dependent options. However, model-free hedge ratios only have the minimum variance property in scale-invariant stochastic volatility models when price-volatility correlation is zero. In other stochastic volatility models and in scale-invariant local volatility models, model-free hedge ratios are not minimum variance ratios and our empirical results demonstrate that they are less efficient than minimum variance hedge ratios.

Present study estimates the hedging effectiveness by applying variance-reduction framework and risk-return framework using near month contracts of three benchmark indices (NIFTY50, NIFTYIT, and BANKNIFTY) traded at National Stock Exchange of India (NSE) for the sample period from June 2000 to March 31, 2017 by using nine optimal hedge ratio models. Out of these nine models, six are constant hedging models and three are time-varying hedging models. The study finds that using variance-reduction framework, highest hedging effectiveness is achieved using Ordinary Least Square model; whereas, 1:1 naïve hedge ratio gives lowest hedging effectiveness. On the other hand, when hedging effectiveness is estimated in a risk-return framework, naïve hedge ratio gives highest hedging effectiveness; whereas, OLS gives the least estimate. Secondly, the coefficients of both optimal hedge ratio as well as hedging effectiveness have increased during post-crisis period implying an increase in the cost of hedging. These findings suggests that conventional hedging models are more efficient than highly complicated time-varying hedging models for estimating optimal hedge ratio, these findings are consistent with the findings of Lien (

The genesis of this IFC White Book lies in the teaching materials prepared for IFC’s Risk Governance Workshops conducted in 20 developing countries during the 2010–2012 time period by the book’s authors. The book and workshops also benefited from the contributions of Torben Andersen of Copenhagen Business School and Zur Shapira of New York University’s Stern School of Business. The contents of the book reflect this team’s years of risk management and governance practice as managers, directors as well as their academic scholarship.

More than 1,000 corporate directors and senior managers participated in the workshop series. The handbook has been shaped by their views, experiences and other feedback and reflects the richness of wide and varied collective experience. The authors have shared specific examples from the participants’ experiences in the handbook — as much as confidentiality constraints allow.

Numerous stock exchanges, regulators, central banks, schools and other institutions partnered with us in hosting the events. The workshops would not have been possible without their administrative support. They also provided key intelligence on local conditions and helped us frame materials to specific emerging market conditions.

IFC staff in local offices and in Washington, D.C. gave their time to help to make these workshops happen. These extended team members are valuable contributors to this final product in as much as their efforts, contacts, and knowledge contributed to the workshops and to the shaping of the consulting teams’ views on risk-taking challenges in emerging markets.

The workshops were funded by contributions from the governments of the Netherlands and Austria, and from IFC. Without their commitment to development, these workshops and this handbook would not have been possible.

The innovative practices always catch-up the eyes of concerned people where ideas and innovation become the hallmark of progress. And even capital market is no far away from this, whereas financial derivatives have given drastic change in the growth of the financial market. The most and key role and purpose behind to introduce derivatives is minimize or eliminating price risk through hedging. The figure seems that the total turnover on the financial derivatives segment increased by Rs.31,349,732 crore during 2011-12 as compared with Rs 2,365 crore during 2000-01. The average daily turnover during 2011-12 was Rs 125,903 crore from Rs 12 crore in 2000-01 which shows CAGR of 120.49% in terms of turnover and CAGR of 115.64% in terms of average daily turnover. India's experience with launch of equity derivatives market has been extremely positive, by world standards. NSE is now one of the prominent exchanges amongst all emerging markets, in terms of equity derivatives turnover. There is an increasing sense that the derivatives market is playing a major role in shaping growth of capital market.

Research articles and research theses constitute two key genres used by scientific communities for the dissemination and ratification of knowledge. Both genres are produced at advanced stages of individuals' enculturation in disciplinary communities present original research aim to persuade the academic community to accept new knowledge claims, and are the result of social negotiations between authors and disciplinary gatekeepers.

Nonfinancial firms that use interest rate swaps are compared with nonusers for the years 1991, 1993, and 1995. Swap use grew from 6% of all firms in 1991 to 8% in 1995. Nonfinancial firms use fixed rate payer swaps more often than floating rate payer swaps. Firms that use swaps are significantly larger and have a higher debt to equity ratio relative to nonusers. Fixed rate payers receive a ratings' upgrade significantly more often than floating rate payers and experience a significantly higher percentage increase in net sales in the year of swap initiation relative to floating rate payers and the industry average. Floating rate payers have a significantly higher S & P bond rating relative to the industry average.

We introduce a class of Markov stochastic processes called mpolynomial, for which the calculation of (mixed) moments up to order m only requires the computation of matrix exponentials. This class contains affine processes, Feller processes with quadratic squared diffusion coefficient, as well as Lévy-driven SDEs with affine vector fields. Thus, many popular models such as the classical Black-Scholes, exponential Lévy or affine models are covered by this setting. The applications range from statistical GMM estimation to option pricing. For instance, the efficient and easy computation of moments can successfully be used for variance reduction techniques in Monte Carlo simulations.

This paper investigates the politeness strategies and mitigation devices used by native and non-native speakers (advanced learners) of Greek when refusing an invitation from an intimate and their consequences for the expression of politeness. Furthermore, it examines whether length of residence or intensity of interaction with native speakers affect non-native speakers’ performance. The data are drawn from role plays performed by native speakers and non-native speakers of two different groups: one with extended length of residence but limited opportunities for social interaction with native speakers and one with less extended length of residence but considerably more frequent opportunities for social interaction. On the basis of these data, it is argued that with regard to the speech act of declining an invitation from a friend, length of residence can be an insufficient measure whereas intensity of interaction can guarantee better results as regards pragmatic appropriateness and politeness. The significant deviations observed between native speakers and non-native speakers with limited opportunities for intimate interaction are attributed to the fact that the latter being economic migrants, who suffer from social seclusion, cannot rely on length of residence alone, in order to acquire sociocultural norms and develop pragmatic ability in the use of speech acts like the one investigated here. This fact combined with the finding that both groups of non-native speakers displayed an underdeveloped pragmatic ability in relation to mitigation devices, such as lexical/phrasal downgraders highlights the need for pedagogical intervention which aims at providing learners with metapragmatic information and meaningful opportunities for interaction that may promote their pragmatic development.

We first derive a one-state-variable partial differential equation, easy to implement, which characterizes the price of a European type Asian option. This result is explained and related to previous literature. We then derive new results on the hedging of an Asian option and propose analytical and numerical analysis on the comparison between Asian and European options. Our methodology which applies to "fixed-strike" Asian options as well as to "floating-strike" Asian options completes and clarifies various results in the literature. In this paper we focus on "backward-starting" Asian options. Our approach is quite general however, and we explain how to adapt our main results to the case of "forward-starting" Asian options.

Japan's primary objective of the ‘free and open Indo-Pacific’ (FOIP) strategy is to shape and consolidate regional order in the Indo-Pacific region based on the existing rules-based international order. The concept initially aimed to achieve two different objectives—shaping a regional order in the Indo-Pacific and ensuring the defence of Japan; however, Japan has gradually shifted its strategic focus onto the former, separating national defence from the FOIP concept, which reflects a change in the degree of its commitment to the two objectives. On the one hand, as its overall security strategy, Japan has determined to steadily enhance its national defence by increasing its own defence capabilities and strengthening the US–Japan alliance, while transforming its partnerships with like-minded states, such as Australia and India, into a diplomatic, and potentially military, alignment. This has been brought about by shifts in the regional balance of power, particularly the rise of China and the relative decline of the United States. On the other hand, as part of its FOIP strategy, Japan's attempts to build a new regional order in the Indo-Pacific region aim to defend the existing rules-based order established by the United States from challengers, particularly China. Yet, given the strategic uncertainty over Japan's international coalition-building efforts to create a new regional order, Japan has made its approach flexible; Tokyo is using its ambiguous FOIP concept to gauge other states' responses, understand their perspectives, and change its strategic emphases accordingly—so-called ‘tactical hedging’. Japan has pursued similar means to achieve the two key objectives. Nevertheless, the country's core interest, the defence of Japan, is more imperative than building a regional order in the Indo-Pacific region, and Japan faces different types of challenges in the future.

This study empirically derives a framework for analyzing certainty about written propositions. CERTAINTY, or EPISTEMIC MODALITY, is a linguistic expression of an estimation of the likelihood that a particular state of affairs is, has been, or will be true.
The study describes how explicitly marked certainty can be predictably and dependably identified in texts, and answers the following research questions:
1) How is explicit certainty expressed linguistically in English?
2) What are the patterns and frequencies of occurrence of explicit certainty markers?
3) How much inter-subjective agreement can be reached by readers when identifying
and categorizing explicit certainty in texts?
A dataset of 2,343 sentences in 80 New York Times Service news reports and editorials was analyzed for occurrences of explicit certainty markers (e.g., definitely, somewhat)
based on a four-dimensional categorization model. The dimensions included: level (absolute, high, moderate, low certainty, and uncertainty), perspective (the writer’s point
of view, reported direct participant’s account, and reported expert’s view), focus (opinions, emotions, or judgments and facts or events), and time (past, present, future, and irrelevant). The intercoder reliability results are modest but show improvements with longer coder training and stricter codebook instructions.

The model’s five-level typology is subdivided into forty-three syntactico-semantic classes. Central modal auxiliary verbs, gradable adjectives in their superlative degree, and adverbial intensifiers frequently express explicit certainty, while adjectival downtoners and adverbial value disjuncts rarely do so. Explicitly-qualified statements occur at a significantly higher rate in editorials than in news reports (means of 0.94 and 0.7 certainty markers per sentence, respectively). Editorials have a high likelihood of starting and ending with an explicit certainty-qualified statement, while news reports tend to start with an implicitly certain statement, and have equal chances of ending with an implicitly or explicitly certainty-qualified statement.
The model can serve as an analytical framework for automated certainty identification, a novel type of analysis in Natural Language Processing (NLP). Such a framework allows
tracking of certainty levels in texts over time and among text genres. This contribution potentially enhances automated search capabilities in NLP and other information access
applications.

Recommend a hedging strategy for the D27,000,000 investment, based on the hedging choices which treasury staff are considering if interest rates increase by 1•1% or decrease by 0•6%. Support your answer with appropriate calculations and discussion.

Volatility modelling in option pricing has been shown to be of first-order importance in improving upon the Black-Scholes pricing biases. However, no consensus emerges on its impact on hedging performance, with more realistic volatility specifications sometimes decreasing the accuracy compared to BS.

This paper does not suppose a priori that the evolution of the price of a financial asset is a semimartingale. Since possible strategies of investors are self-financing, previous prices are forced to be finite quadratic variation processes. The non-arbitrage property is not excluded if the class A of admissible strategies is restricted. The classical notion of martingale is replaced with the notion of A-martingale. A calculus related to A-martingales with some examples is developed. Some applications to no-arbitrage, viability, hedging and the maximization of the utility of an insider are expanded. We finally revisit some no arbitrage conditions of Bender-Sottinen-Valkeila type.

In the pinnacle of the recent conflict in South China Sea, a constant terror of being plunged into a military crisis between Southeast Asian states and China never stops since the last decades. The quarrelling states indeed have many proofs and act as a justified claimant over the territory usage in the disputed territories, therefore creating more problematical situation than it seems to be. Indonesia, as one of the many countries that has interests in South China Sea, proceeds to apply hedging political move against China’s aggression in the area, it is clear that Indonesia wants to keep the status quo over the disputed areas while being able to keep the relationships with China. Not to mention the presence of non-Asian states that are taking parts in the crisis such as United States of America. This essay would like to argue on the compactness of the hedging policy that contain the future of the crisis, the result of Indonesia’s foreign policy that took part in the latter, and adding two possible foreign policies which fully given to the Indonesian government as their own initiative to be added in the national decision of the country.

Perkembangan ekonomi sebuah negara tidak terlepas dari stabilitas dari mata uang negara tersebut yang tentu menjadi sebuah faktor yang akan menentukan jalannya sebuah sistem ekonomi yang baik dalam sebuah negara atau perusahaan. Indonesia yang terkenal akan kekayaan alamnya dan jalurnya yang strategis merupakan sebuah tantangan yang sangat menggiurkan bagi investor investor asing untuk menanamkan sahamnya di negeri ini. Dengan demikian akan melahirkan banyak kegiatan ekonomi yang membutuhkan sebuah sistem yang bisa menjamin kelangsungan dari kegiatan ekonomi tersebut.

This pragmatic descriptive study is aimed at investigating the use of hedging by Arab speakers of English. It is geared towards answering the question of how frequently hedging is used in the abstracts of the Linguistics Master theses written by Saudi students enrolled in the English department at the College of Languages and Translation, Imam Muhammad Ibn Saud Islamic University, Riyadh, Kingdom of Saudi Arabia. A corpus of 100 randomly selected Linguistics Master Theses abstracts (27,411 words), written between 2013 and 2016, were carefully examined quantitatively, and analyzed according to Hyland's (2000) classification of hedging words, using the online LEXICOOL text analyzer. The results indicate that Saudi students rarely use hedging words in writing the abstracts of their Linguistics Master theses. The limited number of hedging words used in the corpus reflects the students' lack of pragmatic competence and cross-cultural variation. The present study is limited to a single genre, i.e., Linguistics Master Theses Abstracts. Further studies combining both discourse analysis and qualitative interviews, focusing on the use of hedging by Arab speakers of English, with more diverse academic texts in different genres, would enhance the findings, and help explain whether pragmatic competence or cross-cultural variation affects the use of hedging by Arab speakers of English.

This paper looks at the infringement of conversational maxim in public conversations in Shona. It probes how the tenets of conversations as proposed by are at times not observed without being uninformative or being uncooperative. Certain maxims can be ignored or violated yet speakers remain informative, cooperative and polite. The conversations referred to here are daily chats, talks and discussions in which Shona speakers find themselves in. The view taken in this paper is that when people violate maxims, or a maxim, there is one which they will be observing hence triggering implicature or the violation itself is a trigger for implicature. A number of ways in which the maxims are violated were found in Shona and categorized as maxim clash, opting out of a maxim and flouting of maxims. Besides these it was also noted that in Shona speakers show that they are cognizant of the maxims by hedging which shows they are about to violate a maxim. The data was obtained under naturalistic conversation settings and is analyzed within the features of conversation implicature.

The delta hedging performance of deterministic local volatility models is poor, with most studies showing that even the simple constant volatility Black-Scholes model performs better. But when the local volatility model is extended to capture stochastic dynamics for the spot volatility process the hedge ratios change. Here we derive the local volatility hedge ratios that are consistent with a stochastic spot volatility and show that the stochastic local volatility model is equivalent to the market model for implied volatilities. We also quantify the hedging error that arises from residual hedging uncertainty and provide an empirical example based on a stochastic normal mixture diffusion model for asset returns.

Accounting is an important part of a business. Thus, utmost care should be given while recording and maintaining transactions. 'Cloud Accounting' is a solution to the recording of transactions of a business and making it easier to access from anywhere-provided we have an Internet Connection. Cloud Accounting provides solutions as hosted software and SaaS. Before we enter into the concepts of Cloud Accounting, we shall explain the concept of Cloud Computing, how it works and differences between Cloud Computing and Software as Service (SaaS). Advantages are more over the disadvantages of cloud accounting. This paper is about the advantages and disadvantages of cloud accounting and also about some cloud accounting softwares such as Sage 100Cloud, QuickBooks Online, Xero and Zap Accounting.

Hedging against market risks has become part of standard procedures in international trade. Derivatives in the form of futures and options are increasingly used to also cover against risks in the freight market in most ship trades. This introductory presentation presents the tools used and it explains their differences.

This article argues that the concept of “hedging” should be understood in the context of the “balancing-bandwagoning” spectrum within the “balance of power” theory, in which hedging is located between balancing and bandwagoning as the state's third strategic choice. Although polarity— unipolar, bipolar, and multipolar—largely determines the likelihood of hedging behavior, during a period of power shift, strategic uncertainty emerges. States, particularly secondary powers, attempt to calculate the risk of balancing, bandwagoning, and hedging, adopting an optimal strategy. To identify states’ strategic behavior, it is important to first examine their economic and military capabilities, and if these indicators are not decisive enough to identify balancing, bandwagoning, or hedging behavior, diplomatic factors should be taken into account, although those are a relatively weaker indicator.

The use of this conceptual framework reveals that Japan's foreign policy behavior has not involved “hedging” vis-à-vis China; instead, Japan's behavior is consistently associated with “balancing” against the risks of China's rise. In addition, while Japan's behavior vis-à-vis the United States is considered to be bandwagoning, Japan made political efforts to strengthen its own military capabilities—internal balancing—which began in the 2010s when Japan relaxed its political constraints on use of its military. This behavior also aimed both to illustrate Japan's efforts related to alliance burden-sharing and to enhance its external balancing with the United States. Yet, the periods from 1997 to 2005 and from 2010 on represent an aberration because Japan engaged one type of hedging—security hedging—vis-à-vis the risk of US commitment reduction to East Asia. In this sense, while concurring with the realists’ argument that Japan's current behavior is characterized as balancing, the argument differs from that of realists who believe that Japan's policy shift to balancing toward China only began with China's rise in the late 2000s or 2010s.

This paper explores the role of doubt and certainty in published research articles from eight academic disciplines. Drawing on a computer corpus of 56 research papers and interviews with expert informants, I identify the principal means by which academics modify their statements and the functions such modifications perform in negotiating knowledge claims in a range of areas of intellectual inquiry. The quantitative results reveal the importance of  hedges and boosters in academic writing and their wide disciplinary variability. The analysis shows that these devices are responsive to the understandings of social communities, and that their use is one of the systematic means by which academics collaborate to both socially create knowledge and construct their disciplinary worlds.  The paper therefore suggests that these differences in rhetorical practices are related to the fact that academics construct knowledge as members of particular disciplinary communities and that their discoursal decisions are influenced by, and embedded in, the epistemological and interactional conventions of their disciplines.

Bitcoin is an encrypted, peer-to-peer network with a decentralized mechanism to promote digital exchange. It can behave like fiat money, commodity, or even an asset. Arguably, its intense market responses do offer shocks to investors encouraging the researchers to investigate Bitcoin's price behavior. The purpose of this paper is to summarize the factors contributing to Bitcoin volatility as well as the hedging capacity of Bitcoin. In this systematic literature review (SLR), relevant articles have been examined from Bitcoin's origination to-date. This review intends to build awareness of factors that trigger Bitcoin volatility and how effectively Bitcoin can be used for the process of diversification. Several studies have evidenced that traditional financial markets volatilities and investor sentiment play a decisive role in igniting Bitcoin volatilities. Some scholars argue the inception of Bitcoin futures has contributed to Bitcoin volatility during the Bitcoin crash period of 2017 to 2018. Lastly, a large stream of research proves the hedging and diversification capacity of Bitcoin. The findings are mostly consistent with correlating Bitcoin against different assets in different periods.

This paper examines the hedge ratio and hedging effectiveness of futures contracts on various commodities majorly traded by ships. In volatile and uncertain market, the usage of derivatives is essential. The increase of usage depends on the effectiveness of the derivatives in managing risks. Understanding the optimal hedge ratio is necessary for creating an effective hedging strategy for managing risks. This research evaluates the constant and dynamic hedge ratio for crude oil futures, iron ore futures, soybeans futures, corn futures and wheat futures. Constant hedge ratio is calculated using models such as OLS, VAR and VECM. Dynamic hedge ratios are calculated using OLS-GARCH and bivariate-GARCH model. The in-sample and out-of sample effectiveness of theses models in reducing portfolio risk is also calculated. The results show that, not a single model shows highest hedging effectiveness for all the commodity futures. So out findings conclude that, the not a single model can be considered as the best model for calculating the performance of the derivatives.
So hedgers should calculate the hedging effectiveness using various models to find the best performance.

The literature on hedging as a secondary state strategy – built largely on evidence from United States-China competition in East and Southeast Asia – focuses on conditions where a major power presents both an economic opportunity and a security threat. In South Asia, in contrast, secondary states facing strategic competition between India and China have pursued hedging strategies in the absence of a security threat. We develop a theoretical reconciliation of these two phenomena. Hedging at its core involves a trade-off between the material benefits and autonomy costs of cooperating with a major power in a competitive environment. States are likely to hedge when these benefits and costs are simultaneously rising. We test the plausibility of this theory in the cases of the Maldives and Sri Lanka. The autonomy trade-off operates both in the absence and in the presence of a security threat, thus offering a theoretical advancement with greater empirical scope.

The paper investigates how modal hedges (Coates 1983) understood as expressions of procedural meaning, i.e. expressions which instruct the addressee/reader how to process the propositional content of an utterance/statement (Watts 2004) are used in product descriptions, advertisements and consumer instructions leaflets for a number of products belonging to the Consumer Health Care category for the purposes of complying with consumer protection laws on the one hand and serving as an implicit disclaimer of manufacturer’s responsibility on the other. The analysis is carried out contrastively for two languages, English and Serbian. The results obtained are discussed and viewed as a matter of cultural variety and difference, especially taking into consideration the fact that consumer protection laws seem to be equally strict in US, UK and Commonwealth, Europe and Serbia.

The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This paper analyzes the price stabilizing properties of puttable and extendible bonds, their potential to help develop interest-rate derivative markets, and their use by governments. Their stabilizing properties imply that, when bond prices fall, prices for puttable and extendible bonds fall by less. Their embedded options work as a cushion and replicate the trading gains from hedging long-term bonds with interest rate derivatives. These bonds can help develop interest-rate derivative markets in developing countries and eventually increase demand for long-term government bonds. Informal evidence from OECD countries suggests that these bonds were useful in the 1980s, when interest rates were volatile. JEL Classification Numbers: G13, G15