Parity: Difference between revisions

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The official rate of exchange between two currencies.
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




== See also ==
== See also ==
* [[Arbitrage]]
* [[Exchange rate]]
* [[Exchange rate]]
* [[Interest rate parity]]
* [[Outright]]
* [[Parity grid]]
* [[Put-call parity theory]]
* [[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


See also