Money-market hedge for a 1-year USD 1 million receivable: borrow USD at 4%, convert to INR at spot 83, invest INR at 7%. Future INR inflow per USD 1 of original receivable ≈ (1+0.07)/(1+0.04) × 83 =

1. Identify what the question asks: this concept maps to moneymarkethedge (§12). 2. Apply the framework or formula relevant to the topic. 3. Eliminate distractors and arrive at the correct option (B). _Source: ICAI BoS CA Final Paper 2, Ch 10 "Foreign Exchange Exposure and Risk Management"_