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Interest Rate Differential
April 30, 2020
Interest Rate Risk
April 30, 2020

Interest Rate Parity

Published by TradersColo at April 30, 2020
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    Interest rate parity (IRP) is a theory that describes the relationship between interest rates and currency exchange rates. Based on the theory, the difference in national interest rates for financial instruments with similar risks and maturities should be equal to the forward rate discount or premium for the foreign currency, which means returns from investing in different currencies should be the same.

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