Hedging Short Run Exposure

Short-run, temporary changes in prices result from unforeseen events or shocks. Some examples are sudden increases in orange juice prices because of a late Florida freeze, increases in oil prices because of political turmoil, and increases in lumber prices because available supplies are low following a hurricane. Price fluctuations of this sort are often called transitory changes.

Ross et al.: Fundamentals of Corporate Finance, Sixth Edition, Alternate Edition

VIII. Topics in Corporate Finance

23. Risk Management: An Introduction to Financial Engineering

© The McGraw-Hill Companies, 2002

CHAPTER 23 Risk Management: An Introduction to Financial Engineering

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