The same model in currency markets is known as interest rate parity.

If the international Fisher effect holds, then so does covered interest rate parity.

Certainly the laws of arbitrage-free interest rate parity would disagree with you.

We can illustrate uncovered interest rate parity as follows.

The following equation represents the uncovered interest rate parity approximation.

This relationship can be employed to test whether uncovered interest rate parity holds, for which economists have found mixed results.

Consider the issue of interest rate parity, a classic measurement of the stock market's relative value.

Uncovered interest rate parity helps explain the determination of the spot exchange rate.

Covered interest rate parity is a no-arbitrage condition in foreign exchange markets which depends on the availability of the forward market.

That covered interest rate parity is a variant of the international Fisher effect is very easily demonstrated as follows.

Combining the international Fisher effect with uncovered interest rate parity yields the following equation:

The opportunity to earn riskless profits arises from the reality that the interest rate parity condition does not constantly hold.

Their empirical analysis demonstrates that positive deviations from covered interest rate parity indeed compensate for liquidity and credit risk.

Two assumptions central to interest rate parity are capital mobility and perfect substitutability of domestic and foreign assets.

I'm going to Google "arbitrage-free interest rate parity" now and see if I can make sense of it...

But more complicated foreign exchange arbitrages, such as the spot-forward arbitrage (see interest rate parity) are much more common.

Economists have extrapolated a useful approximation of uncovered interest rate parity that follows intuitively from these assumptions.

The researchers found evidence for substantial variation in covered interest rate parity deviations from equilibrium, attributed to transaction costs and market segmentation.

Interest rate parity rests on certain assumptions, the first being that capital is mobile - investors can readily exchange domestic assets for foreign assets.

Compare and contrast purchasing power parity and covered interest rate parity as theories determining the exchange rate.

Interest rate parity and Covered interest arbitrage: The simple concept that two similar investments in two different currencies ought to yield the same return.

Interest rate parity is a no-arbitrage condition representing an equilibrium state under which investors will be indifferent to interest rates available on bank deposits in two countries.

This condition is known as real interest rate parity (RIRP) and is related to the international Fisher effect.

When both covered and uncovered interest rate parity hold, they expose a relationship suggesting that the forward rate is an unbiased predictor of the future spot rate.

If financial markets can adjust instantaneously and investors are risk neutral, we can say the uncovered interest rate parity (UIP) holds at all times.