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Currency diversification |
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Currency diversificationUsing more than one currency as an investing or financing strategy. Exposure to a diversified currency portfolio typically entails less exchange rate risk than if all the portfolio exposure were in a single foreign currency.Currency diversification Similar MatchesDiversification coneDiversification coneFor given prices in the Heckscher-Ohlin Model, a set of factor endowment combinations that are consistent with producing the same set of goods and having the same factor prices. Such a set has the form of a cone. Indirect diversification benefitsIndirect diversification benefitsDiversification benefits provided by the multinational corporation that are not available to investors through their portfolio investment. Unique Diversification BenefitUnique Diversification BenefitReduction in the likelihood of financial distress for a conglomerate firm that comes with its diversified investments. Principle of diversificationPrinciple of diversificationThat portfolios of different sorts of assets differently correlated with one another will have negligible unsystematic risk. In other words, unsystematic risks disappear in diversified portfolios, and only systematic risks persist, those related to particular assets. DiversificationDiversificationDividing investment funds among a variety of securities with different risk, reward, and correlation statistics so as to minimize unsystematic risk. Further SuggestionsLiquidity diversificationCone of diversification Naive diversification International diversification diversification Efficient diversification Sector diversification Markowitz diversification |
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