Research Summary

International Finance

by Kenneth A. Froot


Kenneth Froot's research spans a variety of topics in international finance. With regard to securitization of insurance risks, particularly those linked to catastrophes such as windstorms and earthquakes, he is exploring the feasibility of securitized reinsurance, the quantitative and qualitative properties of returns on insurance exposures, and the institutional pressures that exist in the marketplace today. Froot is currently organizing research conferences on these topics. A second focus is risk management for corporations and financial institutions. Here, Froot's research seeks to identify appropriate goals and implementation schemes for risk management programs, particularly in financial institutions in which profitability depends critically on the ability to manage risk. Finally, regarding asset allocation for investors, Froot is examining the impact of investor horizons on optimal currency hedge ratios and, in particular, on prudent asset allocation strategies. Other work in progress includes an inquiry into how stock prices are affected by the countries in which stocks are traded.