Interest rate parity and Unicorn: Difference between pages

From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
imported>Doug Williamson
(Amend link title.)
 
imported>Doug Williamson
m (Delete surplus links.)
 
Line 1: Line 1:
(IRP).
1.


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.
A 'unicorn' is a privately owned company valued at US$1 billion or more.


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.
Examples include Uber (on-demand taxicab and delivery services) and Airbnb (e-commerce / marketplace).




IRP holds very strongly for actively traded currency pairs; less so for currencies which are not so actively traded.  
2.
 
The term 'unicorn' is also used more narrowly to refer to early stage technology companies with valuations of US$1 billion or more, also known as 'tech unicorns'.
 
 
<span style="color:#4B0082">'''''Spotify raises $1bn'''''</span>
 
:"Swedish music streaming company Spotify attracted plaudits from the judges for its approach to managing growth.
 
:During the first half of 2016 [Spotify] closed one of the largest convertibles ever for a tech unicorn, securing a $1bn financing, to support Spotify's growth programme."
 
:''The Treasurer magazine, February 2017 p32 - Deals of the Year.''




== See also ==
== See also ==
* [[CertFMM]]
* [[Black swan]]
* [[Covered interest arbitrage]]
* [[Convertible bonds]]
* [[Efficient market hypothesis]]
* [[e-commerce]]
* [[Foreign exchange]]
* [[Gig economy]]
* [[Forward forward rate]]
* [[Private equity]]
* [[Four way equivalence model]]
* [[Tech unicorn]]
* [[Interest rate]]
* [[Venture capital]]
* [[No arbitrage conditions]]
* [[Spot rate]]


[[Category:Manage_risks]]
[[Category:The_business_context]]

Revision as of 21:20, 3 September 2018

1.

A 'unicorn' is a privately owned company valued at US$1 billion or more.

Examples include Uber (on-demand taxicab and delivery services) and Airbnb (e-commerce / marketplace).


2.

The term 'unicorn' is also used more narrowly to refer to early stage technology companies with valuations of US$1 billion or more, also known as 'tech unicorns'.


Spotify raises $1bn

"Swedish music streaming company Spotify attracted plaudits from the judges for its approach to managing growth.
During the first half of 2016 [Spotify] closed one of the largest convertibles ever for a tech unicorn, securing a $1bn financing, to support Spotify's growth programme."
The Treasurer magazine, February 2017 p32 - Deals of the Year.


See also

Retrieved from ‘https://wiki.treasurers.org/w/index.php?title=Interest_rate_parity&oldid=49576’