Long-Term FX Strategies in 2008 Harvard Case Solution & Analysis

The person responsible for the global distribution of a large pension fund was proposed by the Board of Directors in April 2008 to assess the fact that she thinks that the dollar will appreciate or depreciate in the next five to ten years. She heard mostly negative views on the way to the U.S. in the long term, and the proposal of former Federal Reserve Chairman Alan Greenspan that the Gulf countries, and others, have de-link from the U.S. dollar as a way to contain inflationary pressures. Currently, the fund is 60% in U.S. dollars based on the assets and 40% in foreign markets. The sharp decline of the dollar in relation to a wide range of currencies, the central banks to diversify reserves from dollars, and some account of the OPEC oil and selling currencies other than dollars discouraging news. She considers whether to increase foreign weighting and as the dollar missed his "long-term value," whether it is now more likely to appreciate than depreciate, and, finally, whether the fund should use recent pessimism dollar as an opportunity to profit from their foreign policy positions and increasing the weighting current relatively cheap U.S. equities. "Hide
by Francis Warnock Source: Darden School of Business 11 pages. Publication Date: August 18, 2008. Prod. #: UV1110-PDF-ENG

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