You have no items in your shopping cart.

Hedged Cost of Funds and Interest Rate Arbitrage
Lipson, Marc L. Technical Note F-1565 / Published October 3, 2008 / 13 pages.
Format Price Quantity Select
PDF Download
$6.95
EPUB Download
$6.95
Printed Black & White Copy
$7.25

Product Overview

This technical note provides an overview of interest rate parity and the hedged cost of international borrowings. The note describes the essential steps to hedge international borrowings with forward contracts and describes in detail the link between forward rates and interest rates and what drives that relationship.


Learning Objectives

The learning objective for this technical note is to explain the central concepts related to the calculation and drivers of the cost of a hedge foreign currency borrowing. The note explains the forecast of exchange rates based on parity conditions, illustrates the resulting forecast of financing flows and the calculation of a hedge cost of funds, and discusses the economic drivers of foreign borrowing costs.

  • Videos List

  • Overview

    This technical note provides an overview of interest rate parity and the hedged cost of international borrowings. The note describes the essential steps to hedge international borrowings with forward contracts and describes in detail the link between forward rates and interest rates and what drives that relationship.

  • Learning Objectives

    Learning Objectives

    The learning objective for this technical note is to explain the central concepts related to the calculation and drivers of the cost of a hedge foreign currency borrowing. The note explains the forecast of exchange rates based on parity conditions, illustrates the resulting forecast of financing flows and the calculation of a hedge cost of funds, and discusses the economic drivers of foreign borrowing costs.