Finance and Financial Management Commons^™

An Examination Of G10 Carry Trade During Non-Crisis And Crisis Period (2007-2009), Charles Kwame Armah Danso

Theses and Dissertations - UTB/UTPA

Carry trading is a form of currency trading in which an investor buys assets in a higher interest yielding currency by borrowing in a low interest yielding currency without hedging for exchange risk. I seek to compare and contrast the performance of carry trade strategy before and after the financial crisis (2007-2009). I also compare and contrast how the carry trade strategy and covered interest rate arbitrage fare in different periods. Carry traders do not hedge their position using forward rates whereas covered interest rate arbitrageurs do hedge their position using forward rates. A comparison of the two trading strategies …