International Fisher Effect and International Swaps and Derivatives Association: Difference between pages

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This theory predicts that the spot foreign exchange rate will change over time to reflect and offset differences in interest rates in the respective currencies.  
(ISDA).  


So for example, unhedged currency depreciation losses will on average negate and match exactly any gains on interest differentials between the two currencies.
The industry body responsible, among other things, for standardising swap documentation.


The terms of swaps are normally governed by a minimum of two documents: a Master Agreement (often referred to simply as an ‘ISDA’) and a confirmation of the specific details of a particular trade (the ‘confirmation’).


One way of speculating that spot exchange rate will not change by as much as this, is known as a carry trade.


Among other things, the International Fisher Effect suggests that it should not be possible to earn consistent profits by entering carry trade speculations.
The International Swaps and Derivatives Association was formerly the International Swap Dealers Association.  




== See also ==
== See also ==
* [[Carry trade]]
* [[Credit default swap]]
* [[Depreciation]]
* [[Credit support annex]]
* [[Expectations theory]]
* [[GFMA]]
* [[Fisher Effect]]
* [[ISDA/IIFM Tahawwut Master Agreement]]
* [[Four way equivalence model]]
* [[Interest rate parity]]
* [[No arbitrage conditions]]
* [[Purchasing power parity]]
* [[Spot rate]]
 
[[Category:The_business_context]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Cash_management]]
[[Category:Financial_products_and_markets]]
[[Category:Liquidity_management]]

Revision as of 09:58, 1 September 2018

(ISDA).

The industry body responsible, among other things, for standardising swap documentation.

The terms of swaps are normally governed by a minimum of two documents: a Master Agreement (often referred to simply as an ‘ISDA’) and a confirmation of the specific details of a particular trade (the ‘confirmation’).


The International Swaps and Derivatives Association was formerly the International Swap Dealers Association.


See also