Author: Ziobrowski Brigitte Ziobrowski Alan
Publisher: Emerald Group Publishing Ltd
ISSN: 0960-2712
Source: Journal of Property Valuation and Investment, Vol.13, Iss.1, 1995-01, pp. : 22-43
Disclaimer: Any content in publications that violate the sovereignty, the constitution or regulations of the PRC is not accepted or approved by CNPIEC.
Abstract
Recent studies on foreign investment in US real estate provide evidence that fluctuating exchange rates are likely to reduce the potential gains from international diversification by making these investments more risky. However, other research has suggested that forward currency contracts may provide an effective mechanism for offsetting exchange rate volatility and thus restore the diversification benefits. Examines the use of forward contracts as a means of hedging the currency risk associated with foreign investment in US real estate. Indicates that, although continuous hedging of US real estate with forward contracts allows foreign investors to eliminate most of the risk induced by currency instability, the improvements are insufficient to produce diversification gains for all foreign investors in the context of meanvariance portfolio performance.
Related content
By Pfnuer Andreas Schaefer Christina Armonat Stefan
Journal of Corporate Real Estate, Vol. 6, Iss. 3, 2004-07 ,pp. :
Diversification Issues in Real Estate Investment
By Seiler M.J.
Journal of Real Estate Literature, Vol. 7, Iss. 2, 1999-07 ,pp. :