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Not so ‘evil’: Finance study makes case for hedging

The overuse of financial contracts known as derivatives – which were designed to help companies hedge against risk – was widely blamed for triggering the economic crisis of 2008. None other than Warren Buffet has attacked derivatives as “time bombs – both for the parties that deal in them and the economic system.”

But now, for the first time, researchers have found that hedging can increase firm value. (more…)

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