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Interest Rate Parity, Montes León Delia Daniela, Control 7, 22/10/2022 -…

- - - - 1 month - 3 months
      - longer periods - heavily traded currencies
      - allows businesses to insure themselves against exchange rate changes by buying and selling currencies ahead.
      - either a premium or discount to the spot exchange rate
        
        if premium
        
        more expensive than spot
        
        if discount
        
        less expensive than spot
        
        flat
        
        forward and spot rates for a currency are equal