Hedging with mismatched currencies

This article presents a model of a risk-averse multinational firm facing risk exposure to a foreign currency cash flow. Forward markets do not exist between the firm's own currency and the foreign currency, but do exist for a third currency. Because a triangular parity condition holds among these three currencies, the available forward markets, albeit incomplete, provide a useful avenue for the firm to indirectly hedge against its foreign exchange rate risk exposure. This article offers analytical insights into the optimal cross-hedging strategies of the firm. In particular, the results show that separate unbiasedness of the forward markets does not necessarily imply a perfect full hedge that eliminates the entire foreign exchange rate risk exposure of the firm. The optimal cross-hedging strategies depend largely on the firm's marginal utility function and on the correlation of the random spot exchange rates. © 1999 John Wiley & Sons, Inc. Jrl Fut Mark 19: 859-875, 1999.postprin

The Incentive To Trade Under Ambiguity Aversion

This paper examines the behavior of an exporting firm that sells in both the home country and a foreign country. The firm makes its optimal production and export decisions when facing ambiguous exchange rate risk. Ambiguity is modeled by a second-order probability distribution that captures the firm's uncertainty about which of the subjective beliefs govern the exchange rate risk. Ambiguity preferences are modeled by the (second-order) expectation of a concave transformation of the (first-order) expected utility of profit conditional on each plausible subjective distribution of the exchange rate risk. Within this framework, we derive necessary and sufficient conditions under which the ambiguity-averse firm optimally sells more in the home country and exports less to the foreign country in response either to the introduction of ambiguity or to greater ambiguity aversion when ambiguity prevails. We further show that ambiguity and ambiguity aversion have adverse effect on the firm's incentive to export to the foreign country.postprin

Managing Revenue Risk of the Firm: Commodity Futures and Options

This paper examines the behavior of the competitive firm that faces not only output price uncertainty but also a revenue shock. The firm can trade fairly priced futures and put option contracts for hedging purposes. We show that neither the separation theorem nor the full-hedging theorem holds when the revenue shock prevails. The correlation between the random output price and the revenue shock plays a pivotal role in determining the firm's optimal production and hedging decisions. If the correlation is non-positive, the firm's optimal output level is smaller than that without the revenue shock. Furthermore, the firm's optimal hedge position consists of an under-hedge and a long put option position if the firm's preferences exhibit prudence. The prevalence of revenue risk as such makes financial and operational hedging act as complements to better cope with multiple sources of uncertainty

All the timelike supersymmetric solutions of all ungauged d=4 supergravities

We determine the form of all timelike supersymmetric solutions of all N greater or equal than 2, d=4 ungauged supergravities, for N less or equal than 4 coupled to vector supermultiplets, using the $Usp(n+1,n+1)-symmetric formulation of Andrianopoli, D'Auria and Ferrara and the spinor-bilinears method, while preserving the global symmetries of the theories all the way. As previously conjectured in the literature, the supersymmetric solutions are always associated to a truncation to an N=2 theory that may include hypermultiplets, although fields which are eliminated in the truncations can have non-trivial values, as is required by the preservation of the global symmetry of the theories. The solutions are determined by a number of independent functions, harmonic in transverse space, which is twice the number of vector fields of the theory (n+1). The transverse space is flat if an only if the would-be hyperscalars of the associated N=2 truncation are trivial.Comment: v3: Some changes in the introduction. Version to be published in JHE

Early metallurgy in Sardinia: characterizing the evidence from Su Coddu

This paper contextualizes analyses of a collection of metal artifacts and ostensible metallurgical slag from the prehistoric settlement of Su Coddu in south-central Sardinia (ca. 3400–2850 BCE). To characterize the types of metals and associated alloys utilized by the earliest residents of Su Coddu, two pins and an unshaped lump of unknown composition were analyzed using portable XRF spectrometry. In addition to metal artifacts, a large quantity of putative slag was discovered at the site that is consistently cited as the earliest evidence of in situ smelting in prehistoric Sardinia. To reconstruct firing temperatures and characterize mineral phases, four samples of the overfired material were selected for thin section petrography and powder XRD analysis. The results of this study indicate that the two pins were made of copper while the unshaped lump was composed of pure lead, making it the earliest lead-based artifact on Sardinia. XRD and petrographic analyses of the fired “slags” reveal that these samples are unrelated to metallurgical smelting and are likely burnt wall coatings whose mineralogical phases correspond with unfired plasters also recovered from the site. These results in combination contribute towards understanding early metallurgical practices in Sardinia and are relevant in reconstructing the events that have shaped the life history of Su Coddu

Alveolar macrophage-derived microvesicles mediate acute lung injury

Background Microvesicles (MVs) are important mediators of intercellular communication, packaging a variety of molecular cargo. They have been implicated in the pathophysiology of various inflammatory diseases; yet, their role in acute lung injury (ALI) remains unknown. Objectives We aimed to identify the biological activity and functional role of intra-alveolar MVs in ALI. Methods Lipopolysaccharide (LPS) was instilled intratracheally into C57BL/6 mice, and MV populations in bronchoalveolar lavage fluid (BALF) were evaluated. BALF MVs were isolated 1 hour post LPS, assessed for cytokine content and incubated with murine lung epithelial (MLE-12) cells. In separate experiments, primary alveolar macrophage-derived MVs were incubated with MLE-12 cells or instilled intratracheally into mice. Results Alveolar macrophages and epithelial cells rapidly released MVs into the alveoli following LPS. At 1 hour, the dominant population was alveolar macrophage-derived, and these MVs carried substantive amounts of tumour necrosis factor (TNF) but minimal amounts of IL-1β/IL-6. Incubation of these mixed MVs with MLE-12 cells induced epithelial intercellular adhesion molecule-1 (ICAM-1) expression and keratinocyte-derived cytokine release compared with MVs from untreated mice (p<0.001). MVs released in vitro from LPS-primed alveolar macrophages caused similar increases in MLE-12 ICAM-1 expression, which was mediated by TNF. When instilled intratracheally into mice, these MVs induced increases in BALF neutrophils, protein and epithelial cell ICAM-1 expression (p<0.05). Conclusions We demonstrate, for the first time, the sequential production of MVs from different intra-alveolar precursor cells during the early phase of ALI. Our findings suggest that alveolar macrophage-derived MVs, which carry biologically active TNF, may play an important role in initiating ALI

Hedging and nonlinear risk exposure

This paper documents some empirical evidence of nonlinear spot-futures exchange rates relationships and develops an expected utility model of an exporting firm to examine the associated economic implications. The model shows that the firm should export more (less) and adopt an over (under) hedge in an unbiased currency futures market if the spot-futures exchange rates relationship is convex (concave) rather than linear. When fairly priced currency options on futures are available, the firm should use them in conjunction with the currency futures so as to achieve better hedging against its nonlinear exchange rate risk exposure. This provides a rationale for the hedging role of options when the underlying uncertainty is nonlinear in nature.postprin

Growth suppressive effect of pegylated arginase in malignant pleural mesothelioma xenografts

BACKGROUND: Malignant pleural mesothelioma (MPM) is a difficult-to-treat global disease. Pegylated arginase (BCT-100) has recently shown anti-tumor effects in hepatocellular carcinoma, acute myeloid leukemia and melanoma. This study aims to investigate the effects of PEG-BCT-100 in MPM. METHODS: A panel of 5 mesothelioma cell lines (H28, 211H, H226, H2052 and H2452) was used to study the in vitro effects of BCT-100 by crystal violet staining. The in vivo effects of BCT-100 were studied using 211H and H226 nude mice xenografts. Protein expression (argininosuccinate synthetase, ornithine transcarbamylase, cleaved PARP, cleaved caspase 3, cyclins (A2, D3, E1 and H), CDK4 and Ki67) and arginine concentration were evaluated by Western blot and ELISA respectively. Cellular localization of BCT-100 was detected by immunohistochemistry and immunoflorescence. TUNEL assay was used to identify cellular apoptotic events. RESULTS: Argininosuccinate synthetase was expressed in H28, H226, and H2452 cells as well as 211H and H266 xenografts. Ornithine transcarbamylase was undetectable in all cell lines and xenograft models. BCT-100 reduced in vitro cell viability (IC50 values at 13-24 mU/ml, 72 h) across different cell lines and suppressed tumor growth in both 211H and H226 xenograft models. BCT-100 (60 mg/kg) significantly suppressed tumor growth (p < 0.01) with prolonged median survival (p < 0.01) in both xenograft models. Combining BCT-100 with pemetrexed or cisplatin conferred no additional benefits over single agents. Serum and intratumoral arginine levels were effectively decreased by BCT-100, associated with cytosolic accumulation of BCT-100 within tumor cells. Apoptosis (PARP cleavage in 211H xenografts; Bcl-2 downregulation, and cleavage of PARP and caspase 3 in H226 xenografts; positive TUNEL staining in both) and G1 arrest (downregulation of cyclin A2, D3, E1 and CDK4 in 211H xenografts; suppression of cyclin A2, E1, H and CDK4 in H226 xenografts) were evident with BCT-100 treatment. Furthermore, proliferative factor Ki67 was downregulated in BCT-100 treatments arms. CONCLUSIONS: BCT-100 suppressed tumor growth with prolonged median survival partially mediated by intratumoral arginine depletion resulting in apoptosis and G1 arrest in mesothelioma xenograft models. The findings provide scientific evidence to support further clinical development of BCT-100 in treatment of MPM.published_or_final_versio