other long term contracts.\
The paper is structured as follows: In Section \[sec:model\] we introduce the general multi-currency modeling framework and recall some notions from the benchmark approach. Section \[sec:4over2model\] motivates and formally introduces the 4/2 model as a unifying framework for stochatic volatility models driven by the CIR process as the Heston-based model of [@gnoatto11] and the 3/2-based model of [@martinoplaten13]. The 4/2 model extends the Heston model and allows for the possibility of a failure of the risk neutral paradigm. The analytical tractability of the 4/2 model is demonstrated in Section \[sec:valuationOfDerivatives\], which constitutes a prerequisite for an efficient model calibration, presented in Section \[sec:calibrationResults\]. A practical consequence of the calibration is analyzed in Section \[sec:hedgingLongDatedSecurities\], where we perform hedging in an incomplete market setting without the existence of a risk neutral probability measure. In particular, in the absence of a risk neutral probability measure, we follow the concept of benchmarked risk minimization of [@duplaten14]. We show how to hedge long term products significantly less expensively than the classic risk neutral paradigm permits.

General Setup {#sec:model}
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In this section we present the general modeling framework of the benchmark approach for a foreign exchange (FX) market. Subsection \[sec:specification\] 