On June 05, 2020, a Bank quotes the following : Spot Exchange Rate (US \$1) INR 66.5525/INR 67.5945 2 months' swap points 70/90 1/3 Q.P. Code : 61343 3 months' swap points 160/186 In a spot transaction, delivery is made after two days. Assume 1 swap point =0.0001 You are required to : (a) Determine foreign exchange rate for two months and three months. (b) Compute the annual rate of premium/discount of US\$ on INR, on an average rate. (c) What do the above quotations imply in respect of the term structure of the interest rates in the USA and India? 6. The US Dollar is selling in India at Rs.72.50. If the interest rate for a 3-month borrowing in India is 6% per annum and the corresponding rate in USA is 2.75%. (a) Do you expect United States Dollar to be at a premium or at a discount in the Indian forward market? (b) What is the expected 3-months forward rate for United States Dollar in India? (c) What will be the rate of forward premium or discount