What is meant by interest rate parity?
What will be an ideal response?
Answer: Interest rate parity is the theory that explains the differences between spot rates and forward rates by relating them to differing interest rates in the two countries. Interest rate parity can be expressed by the following identity: Difference in interest rates=ratio of the forward and the spot rates.
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A bond is:
A) The equivalent of a charge on its assets B) A debt of the corporation C) An equity interest in the corporation D) Both A and C E) All of the above
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The chi-square distribution is different from the normal or t-distributions in that chi-square is ________
A) not a curve B) not symmetric C) bi-modal D) symmetrical
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