... Barrick stock is linearly related to its equity. Secondly, the only change, from the absence of hedging program, is the deduction of the gains or losses the program has created. Using the actual and realized gold prices in exhibit 12, we work out the difference of profit between hedging and not. Then, we subtract the equity in exhibit 2 from the difference, we have the unhedged equity. From the data, we run a regression model between the percentage changes in the unhedged equity against the percentage change in actual gold prices: %Equity = ß0 + ß1* %Goldprice + ? We find that the sensitivity of Barrick stock to the changes in gold prices is 5.1 (see appendix). This is much higher than those found by the above papers. The reasons might be (1) the assumptions are quite unrealistic, (2) the effects of the hedging program very much stabilises the stock against to ...

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