You are valuing an Indian company in rupees. The current exchange rate is Rs 45 per dollar and you have been able to obtain a 10-year forward rate of Rs 70 per dollar. If the U.S. Treasury bond rate is 5%, estimate the riskless rate in Indian rupees.

Answer rating: 100% (QA)

We can use the interest rate parity formula to estimate the riskless rate in India... View the full answer