Uncovered interest arbitrage: Difference between revisions
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A speculative activity involving the switching of funds, for example, from a lower interest rate currency into a higher interest rate currency. | A speculative activity involving the switching of funds, for example, from a lower interest rate currency into a higher interest rate currency. | ||
It differs from ''Covered'' interest arbitrage, because no forward foreign exchange contact is transacted to cover the related foreign exchange risk. | |||
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* [[Covered interest arbitrage]] | * [[Covered interest arbitrage]] | ||
* [[Uncovered]] | * [[Uncovered]] | ||
[[Category:Financial_products_and_markets]] | |||
Revision as of 13:04, 2 July 2022
A speculative activity involving the switching of funds, for example, from a lower interest rate currency into a higher interest rate currency.
It differs from Covered interest arbitrage, because no forward foreign exchange contact is transacted to cover the related foreign exchange risk.
