Alternatively, the combined wealth may be used to describe the situation where a single trader takes long and short positions with two external counterparties and hedges them independently using his initial endowment x split into x1 and x2.
In addition, they find weak evidence that the underinvestment problem and the dependence on costly external financing influence corporate hedging behavior.
This much is apparent from some internal company documents leaked to FORBES: As early as March 2001 the elaborate network of external partnerships Enron used to hedge against declining values of its assets was starting to melt down.
"Time and again, operating results have been decidedly negative and materially worse than management's guidance and external expectation," according to the hedge fund.
Naturally, this was not how Mike Platt, founder and boss of BlueCrest, one of the UK's leading hedge fund managers, told his external investors that their $8bn of funds were no longer wanted.
What's more likely is that something external could happen, like the collapse of several more big hedge funds.
Others have reformed their partnership structures.The more cautious have invited in external investors; for example, D. E. Shaw, the world's sixth-biggest hedge fund, sold 20% of the business to Lehman Brothers in 2007.
Sushil Wadhwani, the hedge-fund manager and one of the earliest external members of Bank of England's monetary policy committee, had an interesting question for the audience at a conference hosted by Unigestion, the Swiss-based investment group, earlier this month.
Vlieghe's appointment as one of the four external members of the MPC was announced earlier this week when the chancellor, George Osborne, said the hedge fund economist would replace David Miles on the rate-setting committee from September.
With banks and hedge funds virtually out of the game, state governments are now the most important external source of funding in the film business.Public largesse has led to some odd artistic decisions.
In his 15 years at the helm, Mr. Meyer helped turn the Harvard endowment into something like a hedge fund, with teams inside the organization managing money directly as well as farming out money to external investment firms.
