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- 2013-9-22
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CFAI SS-14 Reading 40, page 300
The return on hedged portfolio is zero. Can sombody help me get back to sanity?
If hedged return is zero (after translation and forward contract) why the hell would someone buy foreign asset? Why would you even construct a hedge? Investor might as well keep the cash under mattress.
I thought we are trying to hedge either the translation risk and/or the economic risk (local currnecy correlated with local asset return) but I didn’t realize that final asset return is zero after that. |
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发表于 2013-4-13 23:25
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