Reasons for active currency management - conflicting info vs answer

CFA Level III
#1

Hi, I’m studying off 2022 Schweser books though should be the same. In SS4 10.1 (Currrency Management - An Introduction) LOS 10.b, it says a reason AGAINST active currency management is having a long time horizon - because “in the long run, currencies revert to a theoretical fair value”, however in the quiz answer it lists “long time horizon” as a reason FOR active currency management??

From lesson:

"Arguments made for NOT hedging currency risk includes the following:

  • In the long run, currencies revert to a theoretical fair value

Arguments FOR active currency management include:

  • In the short run, currency movements can be extreme"

So long time horizon = no need for active, short horizon = reason for hedging correct?

However the answer key says (10.1 Q5):

"Any of the following will shift the portfolio towards active currency management allowing greater manager discretion:

  • A long time horizon for portfolio objectives"

Isn’t this literally contradicting the above??

#2

Only thing I can think of is that in the short run when currencies start to appreciate towards fair value they sometimes blow past that fair value point and end up in overvalued territory. Forgot the term for it but it makes sense for the 2 different points.