Covered Vs Uncovered Interest Rate Parity | FRM Part 1 | CFA Level 2

In this video from the FRM Part 1 and CFA Level 2 curriculum, we take a comparative look at Covered Interest Rate Parity and Uncovered Interest Rate Parity. We try and understand the situation in which we encounter each of these, their mathematical statement, their backing assumptions and whether each of them in persistently violated in practice or not. For more videos on FRM Part 1 preparation, please visit the course page: www.finRGB.com....

[@finRGB]

*FRM Learning Objective* : Distinguish between covered and uncovered interest rate parity conditions.
*CFA Learning Objective* : Explain international parity conditions (covered and uncovered interest rate
parity, forward rate parity, purchasing power parity, and the international Fisher effect).

[@tareknaboulsi8505]

You have a real talent in explaining macro concepts!! This really helped me to understand IRP. Keep going

[@finRGB]

Thank you for the appreciation, Tarek. Glad you found the video helpful.

[@readistreet9383]

I've never seen this concept explained so clear than here. Thanks a lot!

[@finRGB]

Thank you for the kind words of appreciation!

[@AnnuSankeshwari]

I just realised this is the only educational video on IRP, so perfect and making the learner's life easy😃

[@finRGB]

Thank you for the appreciation, Annu.

[@anusaysannyeong2561]

I have been struggling with this topic for too long. thank you.

[@shreyakommuri3929]

woww, I am a physics student and I understood this. Dude, you talented!

[@finRGB]

Thank you Shreya, for the appreciation.

[@micahmainala9357]

The best I have ever ccme across, thank you very much for the well detailed explanation 🔥🔥🙏

[@finRGB]

Glad that you found the video helpful, Micah.

[@Sunil-ne8mx]

Wow, explained nicely. Than you Sir.

[@Felix_Kirsch]

This was a crazy good explanation, can't believe your talent for teaching complex topics, thank you so much!

[@sohandandekar8976]

Thank you! This helps a lot :)

[@ntcuong01ct1]

Dear Friends, I have a question: in IRP (Interest Rate Parity), the base rate of the two currencies is the nominal interest rate or the real interest rate announced by the central banks of the two countries?.

[@finRGB]

These will be the rates offered by respective money market instruments (for e.g. T-Bills) in domestic and foreign currency.

[@PraveenKumar-ei6qr]

Both are same. One is expected future value (contract) other is spot we are going to see in future.

[@rajshivekar]

Wow! what a clear and elegant explanation!