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If the IFE theory holds, that means that covered interest arbitrage is not feasible.
Loanable Funds
The sum of money available for borrowing in the financial markets, where interest rates adjust to match supply and demand.
Interest Rate
The proportion of a total amount of money levied for borrowing it, usually shown as an annual rate percentage.
Loanable Funds Curve
A graphical representation that shows the relationship between the interest rate and the quantity of loanable funds supplied and demanded.
Interest Rate
The cost incurred by a borrower, calculated as a percentage of the principal, for borrowing assets from a lender.
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