# interest parity

**interest parity**__UK____US____noun__[__U__] (**also****interest rate parity**)__FINANCE__**►**the theory that the possible profit from exchanging currency to that of a country with a lower interest rate, then investing the money in that country, is equal to the possible profit from investing the money in the original country: »According to interest parity, interest rate arbitrage cannot produce a risk-free return.

*Financial and business terms.
2012.*

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**interest rate parity**— UK US noun [U] FINANCE ► INTEREST PARITY(Cf. ↑interest parity) … Financial and business terms**parity**— For convertibles, level at which a convertible security s market price equals the aggregate value of the underlying common stock; value/worth of the convertible bond considered only as an equity instrument ( conversion ratio times common price).… … Financial and business terms**Interest rate parity**— is a no arbitrage condition representing an equilibrium state under which investors will be indifferent to interest rates available on bank deposits in two countries.[1] Two assumptions central to interest rate parity are capital mobility and… … Wikipedia**Parity**— is a concept of equality of status or functional equivalence. It has several different specific definitions.* Parity (physics), the name of the symmetry of interactions under spatial inversion * Parity (mathematics) indicates whether a number is… … Wikipedia**Parity of esteem**— is a phrase used in political philosophy to explain a theory to overcome inter communal conflict. Promoters of the theory argue that parity of esteem offers a language for negotiation of a post conflict equilibrium. This negotiation begins with… … Wikipedia**Interest rate cap and floor**— Interest rate c An interest rate cap is a derivative in which the buyer receives payments at the end of each period in which the interest rate exceeds the agreed strike price. An example of a cap would be an agreement to receive a payment for… … Wikipedia**Interest rate parity theorem**— Interest rate differential between two countries is equal to the difference between the forward foreign exchange rate and the spot rate. The New York Times Financial Glossary … Financial and business terms**Parity of zero**— Zero objects, divided into two equal groups Zero is an even number. In other words, its parity the quality of an integer being even or odd is even. Zero fits the definition of even number : it is an integer multiple of 2, namely 0 × 2. As a… … Wikipedia**Parity Price**— When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles the price at which a convertible security equals the value of the underlying stock. 2. Options when an option is trading at its… … Investment dictionary**Parity problem (sieve theory)**— In number theory, the parity problem refers to a limitation in sieve theory that prevents sieves from giving good estimates in many kinds of prime counting problems. The problem was identified and named by Atle Selberg in 1949. Beginning around… … Wikipedia