Title

Speculation In International Money Markets

Abstract

The results of this study suggest that speculative gains are achievable from borrowing a low interest rate currency and depositing the proceeds in a high interest rate currency. Furthermore, the exchange rate risk from speculating can be reduced by diversifying among borrowed and deposited currencies. This analysis concentrated on three low interest rate currencies and two high interest rate currencies, which is sufficient to demonstrate the speculative gains and risk reduction through diversification. However, in a practical setting, a manager should consider all available currencies as borrowing and depositing mediums, which would enhance the speculative gains and degree of risk reduction. © 1983 Atlantic Economic Society.

Publication Date

7-1-1983

Publication Title

Atlantic Economic Journal

Volume

11

Issue

2

Number of Pages

87-90

Document Type

Article

Personal Identifier

scopus

DOI Link

https://doi.org/10.1007/BF02303372

Socpus ID

34250144567 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/34250144567

This document is currently not available here.

Share

COinS