A Foreign Institutional Investor from U.K. proposes to invest 1 million in an emerging market. After a careful analysis of future prospects, India and Hong Kong are short listed. For the next year, which is also the holding period for the FII, expected rates of returns are 15% and 12% in Indian and Hong Kong markets respectively. Withholding tax rates applicable on the returns earned are 15% in India and 12% in Hong Kong. Other information available with the FII includes: Current exchange rates Rs./ 69.50/70 HK $/ 11.15/18 Expected inflation for the next year U.K. - 2% India -4% Hongkong - 3% You are required to find out the rate of return in India and Hong Kong in terms. Assume purchasing power parity holds good in both the countries