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3 R Limited exports goods worth USD 5 0 million to TMK Ltd . and the payment will be receivable one year from now. 3
R Limited exports goods worth USD million to TMK Ltd and the payment will be receivable one year from now. R Ltd is planning to manage its foreign exchange exposure resulting from the export. The following information is collected:
Spot rate: $
year forward rate: $
year future rate: $
year USD interest rate:
year Indian Rupee interest rate:
year call option at a strike price of $ is trading at a premium of
year put option at a strike price of $ is trading at a premium of
Please suggest what R should do to manage its foreign exchange exposure. Show all calculations, evaluation of different choices that the R has
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