Assume that your friend Mr. Aslam resides in USA and send you $20,000 to purchase a plot
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Question:
Assume that your friend Mr. Aslam resides in USA and send you $20,000 to purchase a plot that costs Rs.2200,000 in 2015 at spot rate Rs.110/$1.
- What should be the price of the plot at today spot rate Rs.185/$1 to cover the initial amount invested ($20,000).
- How he can avoid the expected loss due to variations in future spot rate, give your options.
- What should be the either today value of the plot (if spot exchange rate is Rs.190/$1) or today spot rate to make this investment profitable in terms of US$.
Related Book For
Corporate Finance A Focused Approach
ISBN: 978-1439078082
4th Edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham
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