Interest rate parity define interest rate parity what

This preview shows page 3 - 4 out of 4 pages.

8. Interest Rate Parity. Define interest rate parity. What is the relationship between interest rate parity and forward rates?
28 Moffett/Stonehill/Eiteman • Fundamentals of Multinational Finance, Third Edition 9. Covered Interest Arbitrage. Define the terms covered interest arbitrageand uncovered interest arbitrage. What is the difference between these two transactions?
10. Forward Rate as an Unbiased Predictor of the Future Spot Rate. Some forecasters believe that foreign exchange markets for the major floating currencies are “efficient” and forward exchange rates are unbiased predictorsof future spot exchange rates. What is meant by “unbiased predictor” in terms of how the forward rate performs in estimating future spot exchange rates?
.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture