For a foreign equity investment

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Reference no: EM13868324

True and False

1. For a foreign equity investment, hedge ratio of 1 will eliminate all currency risk thus the return in investor's domestic currency will be same as the return in foreign local currency.

2. British investor bullish on the US stock market but concerned about the dollar, can invest in S&P 500 index futures and to minimize the dollar risk, sell dollar future in the amount equal to the principal invested in the S&P 500 index futures.

Reference no: EM13868324

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