With respect to British Pound, the following scenario exists in the foreign exchange markets and money markets in India and Britain Spot rate (Rs Pound) 80 20 80 50 6 m Forward Rate (Rs Pound) 81 50 82 00 Interest Rates Indian Rupee 10 00 10 50 British Pound 5 50 6 00 ITL Ltd expects to receive 10,...

Hedging for ITL Ltd Money Market vs Forward Market Scenario ITL Ltd expects to receive GBP 10000 in ...

With respect to British Pound, the following scenario exists in the foreign exchange markets and money markets

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With respect to British Pound, the following scenario exists in the foreign exchange markets and money markets in India and Britain:

Spot rate (Rs/Pound) : 80.20 - 80.50

6-m Forward Rate (Rs/Pound): 81.50 - 82.00

Interest Rates

Indian Rupee : 10.00 - 10.50%

British Pound : 5.50 - 6.00%

ITL Ltd expects to receive 10,000 in six months and faces a choice of covering the exposure either through money market or forward market. Find which hedge is more efficient.

Related Book For answer-question

Spreadsheet Modeling & Decision Analysis A Practical Introduction to Management Science

ISBN: 978-0324656633

5th edition

Authors: Cliff T. Ragsdale

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Posted Date: Mar 15, 2024 02:22 AM

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With respect to British Pound, the following scenario exists in the foreign exchange markets and money markets

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Spreadsheet Modeling & Decision Analysis A Practical Introduction to Management Science

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