assumes only the existence of the NP and no longer the rather restrictive classical no-arbitrage assumptions, which are equivalent to the existence of an equivalent risk neutral probability measure. Under this much weaker assumption, one can still perform all essential tasks of valuation and risk management. The only condition imposed is that the NP, which is the in the long run pathwise best performing portfolio, remains finite in finite time. Obviously, when this assumption is violated for a model, then some economically meaningful arbitrage must exist causing the candidate for the NP to explode. In this case the respective model makes not much theoretical and practical sense. Note that when a finite NP exists, various forms of classical arbitrage may be present in the market; see e.g. [@Loewenstein00] and [@Loewenstein07] for various examples in the literature on bubbles.\
The current paper illustrates the divergence of the benchmark approach from the classical approach by focusing on the currency market, which is one of the most active markets. We present and calibrate a hybrid model describing the dynamics of a vector of foreign exchange (FX) rates and the associated interest rates. We extend and unify the FX multifactor stochastic volatility models of 