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Buying a country's currency spot and selling it forward to make a net profit off the combination of higher interest rates in the country and any forward premium on its currency.
http://highered.mcgraw-hill.com/sites/0072487488/student_view0/glossary.html
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A combination of transactions on two countries' securities and exchange markets designed to profit from failure of covered interest parity. A typical set of transactions would include selling bonds in one market, using the proceeds to buy spot foreign currency and foreign bonds, and selling forward the return at a future date. See also one-way arbitrage.
http://www-personal.umich.edu/~alandear/glossary/c.html
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The process of borrowing a currency, converting it to a second currency where it is invested, and selling this second currency forward against the initial currency. Riskless profits are derived from discrepancies between interest differentials and the percentage discount or premium between the currencies involved in the forward transaction. Covered interest arbitrage is based on disequilibrium in interest rate parity.
http://wps.pearsoned.co.uk/wps/media/objects/1420/1454800/glossary/glossary.html
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Covered interest arbitrage occurs when a fund manager invests a particular currency, say US dollars, into an instrument denominated in another currency (a stock, bond, or any financial mechanism). The manager then hedges the foreign exchange risk, associated with that instrument, by selling the proceeds of the investment forward: selling futures of that currency in exchange for the original currency (US dollars).
http://en.wikipedia.org/wiki/Covered_interest_arbitrage
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