Indian rupee forward contracts. The Indian rupee (INR) is currently trading at INR 50 = US$1. With 90-day Indian-rupee and U.S. dollar treasury bills currently yielding 10 percent and 2 percent per annum, respectively, what would be the forward INR price of US$1? What assumptions are you making with respect to the credit rating of either government securities? Please explain the calculation Answer - INR 0.01970.
Indian rupee forward contracts. The Indian rupee (INR) is currently trading at INR 50 = US$1. With 90-day Indian-rupee and U.S. dollar treasury bills currently yielding 10 percent and 2 percent per annum, respectively, what would be the forward INR price of US$1? What assumptions are you making with respect to the credit rating of either government securities? Please explain the calculation Answer - INR 0.01970.
Chapter22: International Financial Management
Section: Chapter Questions
Problem 10P
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Question
Indian rupee forward contracts. The Indian rupee (INR) is currently trading at INR 50 = US$1. With 90-day Indian-rupee and U.S. dollar treasury bills currently yielding 10 percent and 2 percent per annum, respectively, what would be the forward INR price of US$1? What assumptions are you making with respect to the credit rating of either government securities?
Please explain the calculation
Answer -
INR 0.01970.
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