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.

1. What should be the price of the plot at today spot rate Rs.185/$1 to cover the initial amount invested ($20,000).
2. How he can avoid the expected loss due to variations in future spot rate, give your options.
3. What should be the either today value of the plot (if spot exchange rate is Rs.190/$1) or today spot rate to make this investment profitable in terms of US$.

Answer rating: 100% (QA)

1 Price of the plot at today spot rate of Rs1851 would be 36960 2 Mr ... View the full answer