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The Spot Exchange Rate for Indian Rupees Is 41 INR/CAD

question 45

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The spot exchange rate for Indian rupees is 41 INR/CAD.The one-year forward exchange rate is 42 INR/CAD and the one-year Canadian interest rate is 4%.What is the implied one-year interest rate in India?


Definitions:

Barrier To Entry

Elements that create barriers or obstacles, making it difficult for new entrants to join a particular market or business sector.

Economies Of Scale

Cost advantages reaped by companies when production becomes efficient, as the scale of operation increases leading to a reduction in average costs.

Long-Run Average Cost

The average cost per unit of output when all inputs, including capital, are variable and optimized.

Marginal Revenue

The increase in revenue resulting from the sale of one additional unit of product.

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