ABSTRACT
Empirical evidence shows that the practice of risk management is limited and does not correspond to the prescriptions of the academic literature. In particular, the practice focuses on hedgin g transactions exposureIn this paper, we provide a new approach to risk management that is consistent both with the main results of the academic literature but takes into account the fact that firms can have a comparative advantage in bearing some kinds of risks. We examine the implications of this new approach for the management of risk management and for risk measures such as Var.s and a firm

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