Saw this on EOC reading 13 example 4 If the asset manager completely hedged the currency risk associated with a one-year currency A deposit using a forward rate contract, the one-year all-in holding return, in currency B, would be closest to The answer is A fully hedged currency A investment would provide the same return as the currency B investment. This is covered interest rate parity, an arbitrage condition.
Question: can some one help me understand completely hedged? if I am hedging currency A investment risk shouldn’t I get currency 's return? why is the return not of currency A but of the hedging instrument?
also in EOC reading 13 example 3
They used mid market rate for FX swap and constantly mention “all in rate”
Can someone explain to me why they use mid market rate and what on earth is “all in rate”?