Do Currency Fundamentals Matter for Currency Speculators? /

The answer seems affirmative. We compare currency carry trades with an investment strategy based on currency fundamentals: taking a long (short) position in undervalued (overvalued) currencies. Carry trades have high risk-adjusted returns, but are subject to "crash risk." In contrast, the...

Cijeli opis

Bibliografski detalji
Glavni autor: Nozaki, Masahiro
Format: Žurnal
Jezik:English
Izdano: Washington, D.C. : International Monetary Fund, 2010.
Serija:IMF Working Papers; Working Paper ; No. 2010/039
Online pristup:Full text available on IMF
LEADER 01722cas a2200241 a 4500
001 AALejournalIMF006289
008 230101c9999 xx r poo 0 0eng d
020 |c 5.00 USD 
020 |z 9781451962864 
022 |a 1018-5941 
040 |a BD-DhAAL  |c BD-DhAAL 
100 1 |a Nozaki, Masahiro. 
245 1 0 |a Do Currency Fundamentals Matter for Currency Speculators? /  |c Masahiro Nozaki. 
264 1 |a Washington, D.C. :  |b International Monetary Fund,  |c 2010. 
300 |a 1 online resource (34 pages) 
490 1 |a IMF Working Papers 
500 |a <strong>Off-Campus Access:</strong> No User ID or Password Required 
500 |a <strong>On-Campus Access:</strong> No User ID or Password Required 
506 |a Electronic access restricted to authorized BRAC University faculty, staff and students 
520 3 |a The answer seems affirmative. We compare currency carry trades with an investment strategy based on currency fundamentals: taking a long (short) position in undervalued (overvalued) currencies. Carry trades have high risk-adjusted returns, but are subject to "crash risk." In contrast, the fundamental strategy has lower risk-adjusted returns, but is less prone to crash risk, because the realization of crash risk coincides with corrections towards fundamentals. In particular, the fundamental strategy outperformed carry trades during the recent global financial crisis. Building on these results, we present early warning indicators for potential turbulence in the currency market. 
538 |a Mode of access: Internet 
830 0 |a IMF Working Papers; Working Paper ;  |v No. 2010/039 
856 4 0 |z Full text available on IMF  |u http://elibrary.imf.org/view/journals/001/2010/039/001.2010.issue-039-en.xml  |z IMF e-Library