Covered Interest Arbitrage

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Covered interest arbitrage

Occurs when a portfolio manager invests dollars in an instrument denominated in a foreign currency and hedges the resulting foreign exchange risk by selling the proceeds of the investment forward for dollars.

A strategy in which one enters a long position in an investment in a foreign currency and simultaneously enters a short position in a forward contract on that same currency. The amount one receives in the sale of the forward contract should equal what one spends on the long investment in the base currency. One enters the short position in order to hedge the exchange risk.

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No references found			A classroom exercise to simulate triangular and covered interest arbitrage. Demonstrating arbitrage using Diamonds and the Dow Jones Industrials ... by Neumann, John J. / Review of Business The theoretical forward rate may be observed in the currency markets where there are no obvious covered interest arbitrage opportunities. Currency swaps, financial arbitrage, and default risk by Usmen, Nilufer / Financial Management			Cout de remplacement Cout et fret Cout historique Cout implicite Cout, Assurance, Fret Couts fixes Couverture Couverture a terme Couverture de defaillance Couverture du besoin de financement Covariance Covarianza covenant Cover Cover Bid Coverage Coverage Initiated Coverage Ratio Coverage Ratios Coverdell Education Savings Account Covered Covered Call covered call option Covered Call Writing Strategy Covered Foreign Currency Loan Covered Interest Arbitrage Covered Interest Rate Parity Covered Option Covered or hedge option strategies Covered position Covered Put Covered Put Option Covered Security Covered Straddle Covered Straddle Write Covered Writer Covering CPA CPF Franc CPI CPM CPPI CPT CQS CR CRA Crack bursatil Crack Spread cradle-to-the-grave management cram down Cram-Down			covered bridge covered bridge Covered Bridge Special Education District Covered Bridge Swim Club Covered bridges Covered bridges Covered Bridges Half Marathon Covered Button Association of New York Covered by Medicare Covered call covered call option Covered call writing Covered call writing strategy Covered calls covered castration covered castration covered castration covered charges covered couch covered electrode Covered Electronic Device covered for covered for covered for covered for covered for Covered foreign currency loan Covered Foreign Currency Loans Covered in the Next Post Covered In-Ground Anaerobic Reactor Covered Interest Arbitrage Covered Interest Rate Parity covered joint covered joint Covered Lighter Covered Lighter, Repair Covered Market Covered Offshore Facility covered operation covered operation covered operation covered operation covered option covered option Covered Options Covered Options Covered or hedge option strategies Covered Other Products Fund Covered Outdoor Learning Area covered person Covered position Covered position Covered position Covered position Covered position Covered put covered put option Covered Put Options Covered Puts Covered Radio Teletype Covered Securities

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