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Inflation Rate
The growth rate of the overall cost level for goods and services, undermining the efficacy of monetary resources.
Spot Rate
The current price in the marketplace at which a given asset—such as a currency, commodity, or security—can be bought or sold for immediate delivery.
Forward Rate
The predetermined price for a transaction that will occur at a specific future date, used in the context of currency and interest rate markets.
Interest Rate Parity
A theory that suggests the difference in interest rates between two countries is equal to the differential between the forward exchange rate and the spot exchange rate.
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