Browse CFA Level 2

Chapter 3: International Parity Conditions in Action

In this section

  • Covered and Uncovered Interest Rate Parity
    Dive into Covered and Uncovered Interest Rate Parity (CIP and UIP), learn the no-arbitrage conditions, explore practical hedging strategies, and discover how risk premiums can undermine the traditional assumptions of parity theories.
  • Purchasing Power Parity and the International Fisher Effect
    Discover how Purchasing Power Parity and the International Fisher Effect explain the relationship between inflation, interest rates, and currency movements for CFA Level II success.
  • Relation among Parity Conditions
    Discover how Covered and Uncovered Interest Rate Parity, Purchasing Power Parity, and the International Fisher Effect interconnect in shaping currency equilibrium and valuation models.
  • Forecasting Exchange Rates under Parity Theories
    A comprehensive guide to using PPP- and UIP-based methods for projecting exchange rates, exploring market deviations, blending multiple parity frameworks, and applying scenario analysis to support sound investment decisions.
  • Vignette-Style Problem Sets and Worked Examples
    Learn how to navigate vignette-based questions on exchange rate parity conditions, apply formulas like CIP and PPP, and assess arbitrage opportunities in real-world economic scenarios.
Sunday, April 13, 2025 Monday, January 1, 1

Important Notice: FinancialAnalystGuide.com provides supplemental CFA study materials, including mock exams, sample exam questions, and other practice resources to aid your exam preparation. These resources are not affiliated with or endorsed by the CFA Institute. CFA® and Chartered Financial Analyst® are registered trademarks owned exclusively by CFA Institute. Our content is independent, and we do not guarantee exam success. CFA Institute does not endorse, promote, or warrant the accuracy or quality of our products.