Fixing the investment horizon, the returns to currency carry trades decrease as the maturity of the foreign bonds increases. The local currency term premia, which increase with the maturity, offset the currency risk premia. The time-series predictability of foreign bond returns in dollars...

Company directors have a legal and moral responsibility to preserve the corporate entity. They must not take unnecessary risks leading to financial distress. Excessive borrowing and foreign exchange exposure entail such risk. The most obvious risk is inability to make loan payments when due. In...