alleryStart learning →Spot is 80 rupees per dollar; rupee interest 8 percent, dollar 4 percent. One-year covered forward is about
A84.00
B77.04
C83.08
D81.54
Answer & Solution
Correct answer: C. 83.08
Forward = 80 x 1.08 / 1.04 = 83.08 rupees per dollar, so the dollar trades at a forward premium.
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