So this question is more specifically about reinvestment risk?
Gil Tabor, CFA and Jan Sills, CFA are discussing how the choice of account type affects investment risk and the amount of that risk borne by the government via taxes.
cpk123 Wrote: ------------------------------------------------------- > http://www.analystforum.com/phorums/read.php?12,91 > 0192,911576#msg-911576 > > agreed this was a crappy question and needed more > clarity. > > here assumption is it is WON denominated returns > have a 1.2 sensitivity to the US Dollar. > > So you have been given GAMMA(LC) directly. > > If it has been Dollar denominated returns have a > 1.2 sensitivity to the US Dollar - you would need > to add +1 to get the WON (LC) denominated > sensitivity to the US Dollar. thank you for providing the link and explanation CPK.
yeah thats where i struggle… surely they have some investment risk because at the end of the time, they will either get taxes on capital gains, or there will be capital losses and they wont get any taxes. the govt wont have reinvestment risk per se, but some of their taxes are at risk due to gains or losses on investments
Just did the LC and nuked it - 12/10 - 60%.