Limitations of Currency Hedging

Hello, A general question on this topic. The schweser notes are not very good for this LOS (reading 42, LOS g). I’ve read the curriculum here and want to confirm that I’m not missing anything. The LOS reads: explain the limitations to hedging the exchange rate risk of a foreign market portfolio and discuss two feasible strategies for managing such risk. Based on the reading, my answer would be that it’s impossible to fully hedge the return on a foreign asset, simply because you don’t know in advance what that return will be. You can only hedge the principle with confidence. So the so called ‘feasible strategies’ are to A) hedge the return on the foreign asset (effectively get rid of it), and hedge the principle which would leave you with no exchange rate exposure at all, or B) to hedge the return and accept the exchange rate risk on the principle. The second approach doesn’t seem like much of a ‘feasible strategy’ for dealing with exchange rate risk. Am I missing anything or is the answer above pretty much it? Thanks for your help!