Quantity risk

Quantity risk

Occurs when the quantity of an asset to be hedged is uncertain.

Quantity Risk

The risk that an insufficient amount of an investment will be hedged and will result in a loss of the unhedged portion.
References in periodicals archive ?
WRI's Paul Reig, Andrew Maddocks and Francis Gassert, in their report, '36 Most Water-Stressed Countries,' listed some quantity risk indicators for all countries and major river basins worldwide.
Despite these gains, Egypt faces a "quantity risk" in the short-term, and quantity risk will continue to rise in the medium and long-term.
Quantity risk could be reduced though not eliminated through domestic production, but not with the current supply chain and system of government intervention.
Wheat imports easily reduce quantity risk, but the bigger issue is really "price risk".
Price risk and reduced purchasing power from the current economic crisis are most relevant today, but quantity risk will also continue to rise.
Opponents of the system may be more apt to accept the other caveat of the measurement system, whereas the DDC agrees to stomach the quantity risk for the scope of the project, while contractors take the productivity risk with the goals that they set for themselves.
Power producers facing quantity risk (demand risk), which is primarily caused by weather events, are assumed to choose weather derivatives to extremize an objective function which models their terminal wealth one period later.
Suppose that the power producer's quantity risk can be decomposed into a systematic portion correlated with local weather index (weather risk) and nonsystematic idiosyncratic individual variation.
Under the assumption that quantity risk is linear in local weather index, q = [alpha] + [beta][t.
Although quantity risk is difficult to hedge, some of the recent derivative products being developed, e.
Those particularly averse to this quantity risk may well delay purchase to secondary trading.
Watch For: How far insurers will take development of ERM programs and whether they can quantity risks for purposes of decision-making.