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Net parity |
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Net parityAntithesis of gross parity. Convertibles: Price of a convertible security including accrued interest. International: Price of international security including commissions, fees, stamp duty, and other transaction costs, translated into U.S. dollar amounts.Net parity Similar MatchesForward parityForward parityNotion that the forward rate is an unbiased predictor of future spot exchange rates. Covered Interest Rate ParityCovered Interest Rate ParityThe principle that the yields from interest-bearing foreign and domestic investments should be equal when the forward currency market is used to predetermine the domestic currency payoff from a foreign investment. Conversion parity or valueConversion parity or valueApplies mainly to convertible securities. Common stock price at which a convertible bond can become exchangeable for common shares of equal value; value of a convertible bond based solely on the market value of the underlying equity. Par value + conversion ratio. See bond value, investment value, parity. Central parityCentral parityPar value. Purchasing power parityPurchasing power parity1. The equality of the prices of a bundle of goods (usually the CPI) in two countries when valued at the prevailing exchange rate. Called absolute PPP. 2. The equality of the rates of change over time in the prices of a bundle of goods in two countries when valued at the prevailing exchange rate. Called relative PPP. Implies that the rate of depreciation of a currency must equal the difference between its inflation rate and the inflation rate in the currency to which it is being compared. Further SuggestionsInterest rate parity line (IRP)Purchasing power parity Conversion parity price Purchasing power parity exchange rate parity ratio Interest rate parity line (IRP) parity Interest rate parity theorem Income disparity Parity value Disparity Parity Relative form of purchasing power parity Put call parity relationship Conversion parity Absolute form of purchasing power parity Interest parity Uncovered interest parity Debt service parity approach Gross parity Purchasing power parity theory Covered interest parity Spot futures parity theorem |
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