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Institutional Investors and Foreign Exchange Risk

Author

Listed:
  • Timo Korkeamaki

    (Hanken School of Economics, Department of Finance and Statistics, Finland)

  • Danielle Xu

    (Gonzaga University, School of Business Administration, USA)

Abstract

We study institutional appetite for stocks with FX exposure, and find variation among institution types. Institutions that are by their nature more likely to engage in active management of foreign exchange risk in their portfolio, namely mutual funds and hedge funds seek stocks with foreign exchange exposure. Institutions that are constrained by regulation tend to avoid foreign exchange exposure.

Suggested Citation

  • Timo Korkeamaki & Danielle Xu, 2015. "Institutional Investors and Foreign Exchange Risk," Quarterly Journal of Finance (QJF), World Scientific Publishing Co. Pte. Ltd., vol. 5(03), pages 1-33, September.
    • Handle: RePEc:wsi:qjfxxx:v:05:y:2015:i:03:n:s2010139215500135
    DOI: 10.1142/S2010139215500135
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    References listed on IDEAS

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