“Real” Risk Management: Opportunities and Limits of Consumption-Based Strategies

Wolfgang Breuer and Olaf Stotz
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Wolfgang Breuer: RWTH Aachen

A chapter in Risk Management, 2005, pp 679-698 from Springer

Abstract: Abstract In general, individuals will be interested in consumption of goods with “original” prices denominated in various currencies. Traditional risk management is nominally oriented and typically neglects this differentiated consumption preferences of investors. We outline the relevance of a consumption oriented “real” risk management and sketch resulting problems connected with such an approach.

Keywords: Risk Management; Cobb-Douglas Utility; Foreign Exchange; Numéraire Problem; Consumption Preferences; Hedging (search for similar items in EconPapers)
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-540-26993-9_35

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DOI: 10.1007/3-540-26993-2_35

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