Currency hedging in the Norwegian seafood industry
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This paper examines the effect of currency hedging on the financial results, stock prices and firm value on ten seafood companies listed on the Oslo Stock Exchange. Running Monte Carlo simulations on a firm’s financial result, we find no financial gains associated with hedging. However, we find evidence that hedging reduce the volatility of foreign revenue. Regressing stock returns as the dependent variable we find little evidence of that currency fluctuations and hedging activities have any significant effect on stock prices. Using Tobin’s Q as a proxy for firm value we find a positive association with hedging, however we fail to confirm this effect using more advanced panel data techniques.
Master's thesis in Finance