Modifying the Business Financial Plan to Reduce Static Risk Management Costs Discussion

American Finance Association

Modifying the Business Financial Plan to Reduce Static Risk Management Costs: Discussion Author(s): Robert A. Rennie Reviewed work(s): Source: The Journal of Finance, Vol. 19, No. 2, Part 1: Papers and Proceedings of the TwentySecond Annual Meeting of the American Finance Association, Boston, Massachusetts, December 27-29, 1963 (May, 1964), p. 352 Published by: Blackwell Publishing for the American Finance Association Stable URL: http://www.jstor.org/stable/2977464 . Accessed: 17/12/2011 08:54

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The Journal of Finance

A. ROBERT RENNIE*: Hedges has effectively explored the question of cash reserves to meet losses in his paper. His discussion has equal application to both large and small corporations,except that it may be more difficult for a smaller firm to meet the conservative standards for liquidity and static risk management.The difficultiesof small business in financing its requirementsshould not be overstressed, however. A study by Irving Schweiger in 1958 indicated that "certain widely-held beliefs concerning small business financing problems are not founded in fact."' The variance of possible losses is an issue that is seldom discussed in connection with the risk situation of a company. Yet, it is one that has particular importance to a small...