Corporate and International Fisher Effect: 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. | |||
So for example, unhedged currency depreciation losses will on average negate and match exactly any gains on interest differentials between the two currencies. | |||
== See also == | == See also == | ||
* [[ | * [[Fisher Effect]] | ||
* [[Four way equivalence model]] | |||
* [[Spot rate]] | |||
Revision as of 14:19, 23 October 2012
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.
So for example, unhedged currency depreciation losses will on average negate and match exactly any gains on interest differentials between the two currencies.
See also