Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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What is interest rate parity?

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Interest rate parity:

Interest rate parity is a theory concerning the association among spot exchange rate and the anticipated spot rate or forward rate of exchange of two currencies depends on interest rates.

Interest rate parity theory states that the forward rate of exchange might be equivalent to the spot currency exchange rate times the interest rate of the domestic country divided by rate of interest of foreign currency.

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