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An Indian company is looking to buy a forward currency contract to hedge its FX risk arising from its operation in the USA. The current

An Indian company is looking to buy a forward currency contract to hedge its FX risk arising from its operation in the USA. The current annual rate in India is 6.5% whereas that in the USA has risen to 2%. These risk-free rates are assumed to remain at these levels in the next 5 months. 


If the spot exchange rate is INR 0.013/US$, what would be the five-month forward exchange rate for this Indian company? Assume there are 151 days in five months and 365 days in a year.

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