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hi all,

i have a question on how to avoid exchange risk by covering in the spot or forward market.

is it as simple as,

using the spot market, uncertainty risk of the future exchange rate is avoided, but there is a opportunity cost of a positive result from appriciation of the currency you are holding?

is this the same for the future market?

when will these be indfferent between the 2 forms of cover as well? is it when covered interest rate does not hold?

thanks in advance, i am confused as hell.


Posts: 202 | From: Hong Kong/Birmingham | Registered: Jun 2007  |  IP: Logged | Report this post to a Moderator

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