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α: calibrated so average coauthorship-adjusted count equals average raw count
We analyze the effectiveness of developed and emerging market foreign-exchange options in international portfolios as a complement to forwards for actively managing portfolio currency risks under the behavioral framework. Although prior research finds forwards dominate options using the mean-variance framework, measures using other objectives may prove more insightful. We find that foreign-exchange options can be useful behavioral complements to forwards for currency risk management from a perspective of regret risk, mean-skewness, and cross-asset lower-tail dependence. We also draw parallels and contrasts between developed and emerging market foreign-exchange options from a behavioral perspective.