Chiang, Yi-Chein; Liao, Tung Liang; Hsiao, Tse-An - In: Applied Financial Economics 21 (2011) 7, pp. 493-503
This study uses stochastic dominance theory, which is distribution free, to evaluate eight foreign exchange hedging strategies for six currencies in terms of US Dollar from 1990 to 2007. Our results show that 'always hedge' is the best performing strategy for European currencies such as British...