Hedging with mismatched currencies
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Broll, Udo; Wong, Kit Pong
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Article
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1999
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John Wiley and Sons
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English
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This article presents a model of a risk-averse multinational firm facing risk exposure to a foreign currency cash flow. Forward markets do not exist between the firm's own currency and the foreign currency, but do exist for a third currency. Because a triangular parity condition holds among these th