_____ parity is the condition where the expected uncovered differential equals zero.

Question

Quizplus · Accepted Answer

Uncovered interest parity is the condition where the expected uncovered differential (difference in interest rates between two countries) equals zero. Covered interest parity refers to the situation where forward exchange rates and spot exchange rates accurately represent the future exchange rate between two currencies. Covered arbitrage and uncovered arbitrage refer to the opportunities to profit from market inefficiencies by buying and selling assets across markets with different prices.

_____ Parity Is the Condition Where the Expected Uncovered Differential