Call Us 080-41656200 (Mon-Sat: 10AM-8PM)
Free Shipping above Rs. 1499
Cash On Delivery*

Risk Management in the Crude Oil Market


Marketed By :  VDM Verlag Dr. Müller   Sold By :  Kamal Books International  
Delivery in :  10-12 Business Days


Check Your Delivery Options

Rs. 3,651

Availability: In stock

  • Product Description

This thesis aims to explore two main issues. First we study crude oil prices in view of weak-form efficiency. Thereupon we look into different hedging strategies that could be used to stabilize income in a market with high volatility. The data used are crude oil prices of West Texas Intermediate between 1987 and 2010. We conclude that the spot crude price and the 3 month future price for the same oil type are weak-form efficient. The two prices tend towards a long-run equilibrium and differences in prices are quickly adjusted. OPEC''s role in the market is discussed as a weakness to price efficiency. Based on efficient prices, we find that the minimum variance hedging method gives the lowest risk, but a naive hedge ratio is easiest to implement in a business strategy for a risk averse management. On the other hand, a risk neutral oil company would get a higher added return by merely buy and sell in the spot market. By introducing a multiple risks hedging model consisting of price risk and exchange rate risk, we suggest that a Norwegian company could reduce its total risk of the portfolio by increasing its exposure in the currency market.

Product Specifications
SKU :COC12881
AuthorEirik Tjentland and Sindre A. Halvorsen
Number of Pages76
Publishing Year11/17/2010
Book TypeEconomics
Country of ManufactureIndia
Product BrandVDM Verlag Dr. Müller
Product Packaging InfoBox
In The Box1 Piece
Product First Available On ClickOnCare.com2015-07-22 00:00:00