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Abstract

This paper presents a method in teaching currency hedging, in which we incorporate a novel strategy recently published in the Journal of Finance (Campbell et al. 2010). We design a project to implement a simple and intuitive version of the strategy that can help students deepen their understanding of diversification and currency hedging. By doing the project, students will learn how to execute the strategy and understand the underlying factors that affect the results. The project also gives students good practice in data collection and analysis. It is a good example of incorporating more advanced academic findings into undergraduate finance education.

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