What’s the difference between uncovered IRP and PPP? They both calculate future spot, right? Can either be used to calculate E(S) for use in SRP? And what’s the difference between IRP and uncovered IRP? They both have the same inputs, yet one yields the future spot, and the other yields the expected spot.
Uncovered IRP vs PPP: used to calculate the same thing, E(S) but used diff inputs and diff assumptions. Uncovered vs covered IRP: they both have same inputs but outputs and assumptions are diff.
PPP= So*(1+Inf cc/1+Inf bc)^t= E S uncovered IRP= So*(1+r cc (n/360))/1+rbc(n/360)=E s both are estimating expected sport but PPP uses inflation and uncovered IRP uses interest rate