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An Indian importer has three months payable of USD 120,000. The USD/INR spot and forward rates available today in the market are as follows:
An Indian importer has three months payable of USD 120,000. The USD/INR spot and forward rates available today in the market are as follows: Spot: 69.4080/90 1mf: 10/14 2mf: 15/20 3mf: 25/30 6mf: 13/10 The prevailing interest rates are as follows: USD: 3% 3.5% INR: 7% 8% 1 If you are expecting USD/INR Spot after 3 months 69.6510/20 then suggest rational strategy to the importers among the following: (i) No hedging and Forward hedging (ii) Money market hedging (5+5=10)
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Introduction When an importer has a foreign currency exposure they have the option to either hedge t...
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International financial management
Authors: Jeff Madura
9th Edition
978-0324593495, 324568207, 324568193, 032459349X, 9780324568202, 9780324568196, 978-0324593471
