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1. Sensitivity of Barrick stock to gold price changes The effect of gold price changes on Barrick stock is hard to correctly measure and it is even harder under the hypothesis of no hedging program. There are many papers studying the sensitivity of Barrick stock to gold price changes, however, very few (probably none) have calculated it with the elimination of hedging program. For instance, Petersen and Thiagarajan(2000) valuate the hedging program by comparing impact of gold price changes to ABX stock and that to Homestake Mining (no hedging). By creating a CAPM model, they find that while ABX's equity returns rise 16% for every 10% increase in gold price, Hometake Mining's is slightly higher at 17%. Tufano (1998) does a similar model but just for ABX, he finds that for every 1% increase in gold price, its stock price increases about 3%. With the elimination of hedging program, it becomes...

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