What’s the difference?
covered interest rate = F uncovered interest rate = E(s)
Covered deals with forward rates and uncovered deals with expected spot rates. Theoretically both should be equal
uncovered is a theoretical relation based on inflation differential. covered is for certain, as locked in with a contract
relative purchasing parity is uses inflation rates to calculate E(s) Uncovered uses interest rates=e(s) Covered uses Interest rate =f