NO.PZ202212300200001501
问题如下：
Determine the most appropriate
currency management strategy for Bhatt. Justify
your response.
选项：
解释：
Correct
Answer:
Passive hedging is
not appropriate because with this approach, the goal is to keep the portfolio’s
currency exposures close, if not equal to, those of a benchmark portfolio used
to evaluate performance. Passive hedging is a rules-based approach that removes
all discretion from the portfolio manager, regardless of the manager’s market
opinion on future movements in exchange rates. In this case, Bhatt has granted
Darden the discretion to manage currency exposures within a range of plus or
minus 25% from the neutral benchmark position.
A discretionary
hedging approach is not appropriate because Bhatt has granted Darden more than
limited discretion (plus or minus 25% from the neutral position), indicative of
an active currency management approach. The discretion granted suggests that
Darden’s primary goal is to take currency risks and manage them for profit with
a secondary goal of protecting the portfolio from currency risk. The primary
goal of a discretionary hedging approach is to protect the portfolio from
currency risk while secondarily seeking alpha within limited bounds.
The discretion granted suggests that Darden’s primary goal is to take currency risks and manage them for profit with a secondary goal of protecting the portfolio from currency risk. The primary goal of a discretionary hedging approach is to protect the portfolio from currency risk while secondarily seeking alpha within limited bounds.
