Browsing by Subject "Derivative securities."

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    Does derivative usage affect firm-level risk?
    (2008) Küçükbahçıvan, Yüsra
    This thesis aims to explore the effect of derivative usage on firm-level risk among U.S. non-financial firms for the year 2004, by using accounting information. Firm-level risk is proxied by four different risk measures; standard deviation of daily stock returns, beta, idiosyncratic risk and RiskGrade. First, univariate analyses are employed to test the difference in risk levels between firms that use and do not use derivatives. Second, regression analyses are conducted by taking into account control variables that are documented to affect risk in the literature. As a result of these analyses, it is documented that derivative usage leads to a decrease in firm-level risk.