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To: Jon Koplik who wrote (103080)	8/22/2001 2:30:48 AM
From: marginnayan	Respond to of 152472

Thanks Jon for your comments on companies hedging their currency exposure. Now I even have a better understanding of word iconoclast. analytical economists: The magnitude of most corporations' "ideal" overseas stock allocation for their pension assets just happened to be pretty much exactly equal to the magnitude of all of the currency hedging that the "real business of the company" was conducting. It is (theroretically) possible to achieve results similar to professor's (a real iconoclast) approach if the companies had done simple currency hedging by going short U.S dollar against a basket of rising foreign currencies. Thus, in a rational world -- companies should have stopped ALL currency hedging, AND ... ALL overseas investing of pension assets. But, of course, this never happened ... If I got this right, then in real world (which at many times) is not rational, companies do tend to hedge their currency exposure.