Corporate Hedging in Theory and Practice

Preface

Introduction

Christopher L. Culp and Merton H Miller

The Foundations of Hedging in Futures Markets

The Theory of Hedging and Speculation in Commodity Futures

Johnson

The Hedging Performance of the New Futures Markets

Ederington

Futures Trading and Hedging

Working

New Concepts Concerning Futures Markets and Prices

Working

Rationales for Corporate Hedging

Should Firms Use Derivatives to Manage Risk?

Fite and Pfleiderer

The Determinants of a Firm’s Hedging Policies

Smith and Stulz

Risk Management: Coordinating Investment and Financing Policies - Rethinking Risk Management

Stulz

The MGRM Controversy?Hedging Objectives Do Matter

Metallgesellschaft and the Economics of Synthetic Storage

Culp and Miller

Auditing the Auditors

Culp and Miller

Simulating Supply

Bollen and Whaley

Maturity Structure of a Hedge Matters: Lessons from the Metallgesellschaft Debacle

Mello and Parsons

The Collapse of Metallgesellschaft: Unhedgeable Risks, Poor Hedging Strategy, or Just Bad Luck?

Edwards and Canter

Hedging in the Theory of Corporate Finance: A Reply to Our Critics

Culp and Miller

The Mathematics of Hedging Long-Dated Obligations with Short-Dated Futures

Analytics Underlying the Metallgesellschaft Hedge: Short-Term Futures in a Multi-Period Environment

Hilliard

Hedging Long Maturity Commodity Commitments with Short-Dated Futures Contracts

Brennan and Crew

Metallgesellschaft: A Prudent Hedger Ruined, or a Wildcatter on NYMEX?

Pirrong

Hedging Long-Term Exposures with Multiple Short-Term Futures Contracts

Neuberger

Hedging Long Run Commitments: Exercises in Incomplete Market Pricing

Ross

The Stochastic Behavior of Commodity Prices: Implications for Valuation and Hedging

Schwartz

Conclusion - The State of the Corporate Hedging Debate

Culp and Miller