Article ID Journal Published Year Pages File Type
5069485 Finance Research Letters 2016 4 Pages PDF
Abstract
This paper explores the risk profile of individual currency carry trades. Findings indicate that carry trade profitability depends on a country's political risk, supporting the risk-based view on forward bias. Political risk effect originates as a component of government actions and is more pronounced in emerging economies and in countries with high interest differentials.
Keywords
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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The effect of political risk on currency carry trades
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