The key arguments in opposition to currency hedging such as market efficiency, agency theory, and diversification do not have financial theory at their core.

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The key arguments in opposition to currency hedging, such as market efficiency, agency theory, and diversification, do have financial theory at their core. Market efficiency suggests that attempting to outperform the market through currency hedging is futile, while agency theory argues that managers may not act in the best interest of shareholders when making hedging decisions. Diversification suggests that investors can mitigate currency risk by holding a globally diversified portfolio. These arguments are all based on financial theory.

The Key Arguments in Opposition to Currency Hedging Such as Market