The One-Year Forward Exchange Rate Is 45 INR/USD

question 94

Multiple Choice

The one-year forward exchange rate is 45 INR/USD.If the one-year interest rate in the United States is 5% and in India is 8%,what is the spot exchange rate so as to preclude arbitrage?

• A)43.23
• B)43.75
• C)43.99
• D)44.32
• E)44.51

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Definitions:

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A sexually transmitted infection caused by the bacterium Neisseria gonorrhoeae, characterized by discharge from the genitals and, if left untreated, can lead to serious health complications.

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The bacterium that causes syphilis, a sexually transmitted infection that can have serious health consequences if not treated.

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A group of antibiotics used to treat various bacterial infections, derived from the Penicillium fungi.

Depo-Provera

A contraceptive injection containing progesterone that prevents ovulation, used as a form of birth control effective for three months per dose.