Currency risk management is important for global portfolios from "summary" of Institutional Investment Management by Frank J. Fabozzi
Currency risk management is a crucial aspect of managing global portfolios. When investors diversify their portfolios internationally, they are exposed to fluctuations in exchange rates. These fluctuations can have a significant impact on the overall returns of the portfolio. Therefore, it is essential for investors to implement strategies to mitigate the effects of currency risk. One common approach to currency risk management is hedging. Hedging involves taking positions in the foreign exchange market that offset the potential losses from adverse currency movements. By hedging their currency exposure, investors can protect their portfolios from unwanted currency risk. Another important aspect of c...
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