bpdulog

I don't have the answer since I made it from example 19 on V4, P137.

I think bp is right. Here is my thinking:

"Euro will depreciate less relative to UK Pound than what is implied by forward market".

is equivalent to

"UK Pound will appreciate less relative to Euro than what is implied by forward market."

So, he will be better off if hedging UK pound.



Edited 1 time(s). Last edit at Thursday, May 26, 2011 at 01:11AM by deriv108.