Interest rate parity

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Notion

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Science and technology

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What Wikipedia says

Interest rate parity is a no-arbitrage condition representing an equilibrium state under which investors compare interest rates available on bank deposits in two countries. The fact that this condition does not always hold allows for potential opportunities to earn riskless profits from covered interest arbitrage.

Excerpt from the Wikipedia article “Interest rate parity”, under the CC BY-SA 4.0 license. Read the article on Wikipedia