Volatility is one of the most important characteristics of any financial instrument return. The idea which states that all information about financial assets is contained in its price is implemented in current approaches to modeling the volatility of financial assets and it corresponds well with...

The inability to effectively hedge against unfavourable exchange rate movements, using thecurrent forward exchange rate as the only guideline, is a key inhibiting factor of internationaltrade. Market participants use the current forward exchange rate quoted in the market to makedecisions...