The One-Year Forward Exchange Rate Is 50 INR/USD

question 33

Multiple Choice

The one-year forward exchange rate is 50 INR/USD.If the one-year interest rate in the United States is 5% and in India it is 8%,what is the spot exchange rate so as to preclude arbitrage?

• A)47.23
• B)48.61
• C)48.99
• D)49.32
• E)49.12

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