Managing a firm has always involved managing risks, but in this high–tech information age, managing risk frequently involves establishing derivative positions. In this Research Foundation monograph, Gastineau, Smith, and Todd begin by providing an overview of the elements of risk management and then delve into the specifics of derivative and hedging activity under SFAS No. 133. They conclude by coming full circle and discussing the implications for financial analysts of a firm's risk management practices and its derivative and hedging activity.