Examlex
According to purchasing-power parity theory, the real exchange rate should equal the nominal exchange rate.
Risk-Free Rate
An anticipated gain from an investment devoid of financial risk, frequently illustrated through the returns on state bonds.
Arbitrage
The simultaneous purchase and sale of an asset in different markets to exploit price differences for a risk-free profit.
Mispricing
The occurrence of an asset being priced either higher or lower than its intrinsic value due to market inefficiencies or errors in analysis.
Riskless Profits
Profits made from trading or investing that are deemed to have no risk; often considered unrealistic in practical financial markets.
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