Acceso usuarios
Standard futures hedging policies are based on the so-called optimal hedge ratio which implicitly ignores the competitive environment in which the firm opertates. The purpose of this study is to derive an optimal hedging policy for a firm facing random production costs and a downward sloping demand curve for its product. In this context, the sudy shows that the optimal number of futures constracts is positively related to the elasticity of the firm's demand function.
