1.

Record Nr.

UNINA9910788524003321

Autore

Merritt Matthew

Titolo

Currency Risk Premia in Global Stock Markets / / Matthew Merritt, Shaun Roache

Pubbl/distr/stampa

Washington, D.C. : , : International Monetary Fund, , 2006

ISBN

1-4623-9621-6

1-4527-4610-9

1-282-44794-7

1-4519-9116-9

9786613821140

Descrizione fisica

1 online resource (27 p.)

Collana

IMF Working Papers

Altri autori (Persone)

RoacheShaun

Soggetti

Foreign exchange rates

Foreign exchange market

Banks and Banking

Finance: General

Foreign Exchange

Investments: General

Money and Monetary Policy

Financing Policy

Financial Risk and Risk Management

Capital and Ownership Structure

Value of Firms

Goodwill

Monetary Systems

Standards

Regimes

Government and the Monetary System

Payment Systems

General Financial Markets: General (includes Measurement and Data)

Investment

Capital

Intangible Capital

Capacity

Financial services law & regulation

Monetary economics

Finance

Macroeconomics



Currency

Foreign exchange

Exchange rate risk

Currencies

Stock markets

Return on investment

Exchange rates

Financial risk management

Money

Stock exchanges

Saving and investment

United States

Lingua di pubblicazione

Inglese

Formato

Materiale a stampa

Livello bibliografico

Monografia

Note generali

"August 2006."

Nota di contenuto

""Contents""; ""I. INTRODUCTION""; ""II. PREVIOUS LITERATURE""; ""III. MODEL SPECIFICATION ""; ""IV. ESTIMATION""; ""V. DATA AND PRELIMINARY STATISTICS""; ""VI. MAIN RESULTS""; ""VII. CONCLUSIONS""; ""REFERENCES""

Sommario/riassunto

Large fundamental imbalances persist in the global economy, with potential exchange rate implications. This paper assesses whether exchange rate risk is priced across G-7 stock markets. Given the multitude of hedging instruments available, theory suggests that stock market investors should not be compensated for currency risk. However, data covering 33 industry portfolios across seven major stock markets suggest that not only is exchange rate risk priced in many markets, but that it is time-varying and sensitive to currency-specific shocks. With stock market investors typically exhibiting "home bias," this suggests that investors are using equity asset proxies to hedge the exchange rate risks to consumption.