Impact and Interest rate parity: Difference between pages

From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
imported>Doug Williamson
(Add links.)
 
imported>Doug Williamson
(Amend link title.)
 
Line 1: Line 1:
1.  ''Sustainability - impact reporting - Impact Management Project (IMP)''.
(IRP).


For the purposes of impact management and reporting, the IMP defines impact as a change in an outcome caused by an organisation.
This theory describes the expected relationship between [[Spot rate|spot]] and [[Forward forward rate|forward foreign exchange rates]], and the [[Interest rate|interest rates]] in the related currency pair.


Such a change can be positive or negative, intended or unintended.
Under efficient market conditions the interest rate parity theory predicts that the forward FX rate (available in the market today) should be equal to the spot FX rate, adjusted for the difference in interest rates between the currency pair over the relevant period.




2.  ''Sustainability - environmental impact''.
IRP holds very strongly for actively traded currency pairs; less so for currencies which are not so actively traded.  
 
Abbreviation for environmental impact.
 
 
3.  ''Effects - significant effects.''
 
Any effect on an individual, organisation, or system.
 
Especially a substantial effect.
 
For example, ''business impact analysis'' includes analysing the potentially negative effects of disruption on business activities.
 
 
4.  ''Verb.''
 
To have an effect, especially a substantial effect.




== See also ==
== See also ==
* [[Business impact analysis]]
* [[CertFMM]]
* [[Environmental impact]]
* [[Covered interest arbitrage]]
* [[Environmental Impact Assessment]] (EIA)
* [[Efficient market hypothesis]]
* [[ESG Credit Impact Scores]]
* [[Foreign exchange]]
* [[Global Impact Investing Network]]
* [[Forward forward rate]]
* [[Impact economy]]
* [[Four way equivalence model]]
* [[Impact investing]]
* [[Interest rate]]
* [[Impact Investing Institute]] (III)
* [[No arbitrage conditions]]
* [[Impact Management Project]]  (IMP)
* [[Spot rate]]
* [[Impact reporting]]
* [[Impact Taskforce]]
* [[International Sustainability Standards Board]]  (ISSB)
* [[Just transition]]
* [[Multilateral development bank]]  (MDB)
* [[Natural capital]]
* [[Principles for Responsible Investment]]  (PRI)
* [[Responsible investment]]
* [[Social impact bond]]
* [[Sustainable investment]]
* [[Sustainability]]
* [[Sustainability Accounting Standards]]
* [[Sustainability Accounting Standards Board]]
* [[Total Societal Impact]]
* [[Value Reporting Foundation]] (VRF)
 
 
==External link==
 
*[https://impactmanagementproject.com/impact-management/impact-management-norms/ Impact management norms - Impact Management Project]


[[Category:The_business_context]]
[[Category:Corporate_finance]]
[[Category:Investment]]
[[Category:Long_term_funding]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]

Revision as of 20:18, 28 April 2016

(IRP).

This theory describes the expected relationship between spot and forward foreign exchange rates, and the interest rates in the related currency pair.

Under efficient market conditions the interest rate parity theory predicts that the forward FX rate (available in the market today) should be equal to the spot FX rate, adjusted for the difference in interest rates between the currency pair over the relevant period.


IRP holds very strongly for actively traded currency pairs; less so for currencies which are not so actively traded.


See also