active currency management, passive currency management. Is there a third one?

CFA Level III
#1

Is there a third one called “no currency management”? From what I understand, any attempt to hedge will go into active currency management, while the rest goes to passive currency management

#2

What the text says is, if you passively hedge currency eg by hedging principle, you’re taking a position and so you’re actively managing the currency risk. And if you do nothing you are effectively passively managing the the ccy. So effectively it’s either active or passive, and doing nothing is passive.

#3

Passive Currency Hedging is hedging to match B/m Exposure. Anything other than that is Acive, even taking no position in currency management is active as you are effectively holding a different position than the B/m.

#4

Is it an active currency mgmt if “hedging currency risk in portfolio but it’s unhedged in benchmark”?

#5

deriv108 Wrote: ------------------------------------------------------- > Is it an active currency mgmt if “hedging currency > risk in portfolio but it’s unhedged in benchmark”? Yes