Parity: Difference between revisions
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A relationship between market prices at which there are no opportunities for [[arbitrage]]. | A relationship between market prices at which there are no opportunities for [[arbitrage]]. | ||
Under parity, the prices of composite [[synthetic]] instruments are exactly the same as the prices of the related [[outright]] instruments. | |||
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An exchange rate of 1 between two currencies. | An exchange rate of 1 between two currencies. | ||
For example, GBP 1 = 1 USD | |||
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* [[Put-call parity theory]] | * [[Put-call parity theory]] | ||
* [[Synthetic]] | * [[Synthetic]] | ||
[[Category:The_business_context]] | |||
[[Category:Identify_and_assess_risks]] | |||
[[Category:Manage_risks]] | |||
[[Category:Risk_frameworks]] | |||
[[Category:Risk_reporting]] | |||
[[Category:Financial_products_and_markets]] | |||
Latest revision as of 13:21, 27 September 2022
1.
A relationship between market prices at which there are no opportunities for arbitrage.
Under parity, the prices of composite synthetic instruments are exactly the same as the prices of the related outright instruments.
2.
The official rate of exchange between two currencies, if there is one.
3.
An exchange rate of 1 between two currencies.
For example, GBP 1 = 1 USD
