FCRP - HEDGE? forward, expected, exchange, will

anothercfainnyc

CAN I say when


FCRP>0 ...no need to hedge. expected exchange risk will be compensated. risk bring return.
FCRP=0 ...no need to hedge. forward = expected. hedge is useless here.
FCRP<0 ...hedge (buy forward) is a must.

right? thanks.

DSquaredSlim

If FCRP > 0, then you will be rewarded for staying unhedged (i.e. you will get a premium).

So I think what you wrote is wrong.