COVERED INTEREST ARBITRAGE
Investment strategy in which investor employs a forward contract to hedge against exchange rate risk. It uses favorable interest rate differentials to invest in a higher-yielding currency, and hedges the exchange perils through a forward currency contract. This is feasible if the cost of hedging the exchange risk is lower than the additional return generated by investing in a higher yielding currency. An investor who employs this strategy makes sport and forward market transactions at the same time, seeking to obtain riskless profit by combining currency pairs.
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Tit for Tat
Game theory mechanism subject to a payoff matrix similar to a prisoner’s dilemma. Anchored on the concepts of retaliation and altruism, this ...
Nonsegregated Disclosures
Information that must be presented legally anywhere in a lease agreement. These are required by the Federal Reserve Board Regulation M. The lease a ...
Product Line
A series of related products which are all made or manufactured by the same company.
Behavioral Economics
The scientific study on how the mind thinks and how each person reacts as it relates to the process of decision making in economics of individuals ...
Infant-Industry Theory
A theory stating the emerging domestic industries must be protected against foreign competition until they become established and mature. In econom ...
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SEE FOREX TUTORIAL
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You are one step closer to acquiring your dream house, and you want to make sure it has substantial protection against any disaster or occurrence t ...
A Guide to Your Personal Income Tax: Steps to Take before April 15
Taxpayers, remember these two dates when filing your tax return: December 31 and April 15. We have previously discussed what to do before the year ...
Options Transaction Via Day Trading
Given so many concepts and terminologies in the foreign exchange market, anyone outside the field of finance may have a hard time coping up. Howeve ...
Ethical Investing: Its Advantages and Disadvantages
Believe it or not, ethical investing comprises a huge emotional component. Investors are human; therefore, they let emotions drive their decisions. ...
Retirement Planning: Maximizing the Power of Compounding
“The early bird catches the worm.” – William Camden
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