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Abstract
Timberland investments have attracted institutional investors due to their hedgingproperties and low correlation with financial assets. These characteristics make
timberland suitable for balancing traditional asset portfolios. However, timber price
volatility, biological growth uncertainty, long-term maturity, and exposure to
environmental hazards contribute to risk perception. Over the years, researchers have
explored various methods to estimate timberland investment risk, focusing primarily on
independent risk analysis. This dissertation explores integrated risk analysis to account
for multiple risk sources, offering a more realistic approach for this alternative asset,
which faces several risks throughout its maturation. The integration includes timber price
volatility, biological growth risk, and hurricane damage. Several mathematical models
were used to represent these uncertainties, from multivariate time series and seemingly
unrelated regression models to nonlinear programming, to simulate expected value
distributions, volatilities, and correlations. These outcomes were integrated to examine
how risk interaction affects returns and expected revenue streams. The results indicate
that biological growth risk plays a dominant role in shaping expected returns, surpassing
the impact of timber price volatility. Hurricane risk proves less influential than the
combined effect of biological growth and price uncertainty, even in regions classified as
highly hurricane-prone.