Sign up  |  Log in

Interest Rate Parity and Ethics

A Kaplan practice question and answer states essentially: Joe Smith can guarantee risk less returns to clients by using interest rate parity and the guarantee is therefore accurate.

Is…this right?

Kick start your CFA® Program prep with Top Instructors you’ll love and a course that offers free updates until you pass – We’ve got you covered.

Covered interest rate parity is built on the foundation of arbitrage. And per arbitrage rules they are essentially risk free trades.