Burnside, Craig; Eichenbaum, Martin S.; Kleshchelski, Isaac - 2008
from uncovered interest parity. We document the properties of the carry trade, a currency speculation strategy that … hedged version of the carry trade which protects the investor against large, adverse currency movements. This strategy …, implemented with currency options, yields average payoffs that are statistically indistinguishable from the average payoffs to the …