Covered interest arbitrage: related pages
Carry trade A forex trade that exploits differences in interest rates.
Uncovered interest arbitrage A combination of trades that makes a profit from an inconsistency between exchange rate differentials and the forward premium (discount) on a currency.
Positive carry A profitable difference between the income an investment generates and the cost of financing it.
Forward rate bias The tendency of currency markets to over-estimate movements in currency.
Interest rate parity The interest rate parity relationship that can be derived from assuming no covered interest arbitrage.
Copyright Graeme Pietersz © 2005-2019
