Sir, could you pls explain roll yield once..
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The roll yield (also called the roll return) on a hedge results from the fact that forward contracts are priced at the spot rate adjusted for the number of forward points at that maturity. This forward point adjustment can either benefit or detract from portfolio returns (positive and negative roll yield, respectively) depending on whether the forward points are at a premium or discount, and what side of the market (buying or selling) the portfolio manager is on. A positive roll yield results
from buying the base currency at a forward discount or selling it at a forward premium (the intuition here is that it is profitable to “buy low and sell high”). Otherwise, the roll yield is negative (i.e., a positive cost).