The One-Year Forward Exchange Rate Is Rupees 45

question 4

Multiple Choice

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

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

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Definitions:

Mentoring

A relationship in which a more experienced or knowledgeable person helps to guide a less experienced or less knowledgeable person.

Strong Cultures

Organizational cultures with deeply ingrained values, beliefs, and behaviors shared by members, influencing cohesion and performance.

Organizational Cultures

The shared values, beliefs, and norms that characterize an organization and influence its members' behaviors.

Resistance to Change

The unwillingness or inability of individuals or organizations to adapt to new conditions, methods, or innovations.