O'Reilly logo

Fundamentals of Financial Management, Third Edition by Vyuptakesh Sharan

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

SOLVED NUMERICAL PROBLEMS
  1. If direct quote is Rs 39/US $, how can this exchange rate be presented under indirect quote?

    Solution

    US $ 1/Rs 39 = US $ 0.0256/Re.

     

  2. If indirect quote is US $ 0.025/Re, how can this exchange rate be shown under direct quote?

    Solution

    Re 1/US $ 0.025 = Rs 40/US $.

     

  3. Consider the following bid-ask prices: Rs 40 − 40.40/ US $. Find the bid-ask spread.

    Solution

    Bid-ask spread = {(ask rate - bid rate)/ask rate} × 100

    (40.40 − 40.00)/40.40 = 0.0099 or 0.99%

     

  4. Find out the forward rate differential if spot rate of US $ is Rs 40.00 and one-month forward rate is Rs 40.80.

    Solution

    Forward rate differential = {(For. rate – spot rate)/spot rate} × A × 100

    360/30 {(40.80 − 40.00)/40.00} × 100 = 2.0% It will be known as a forward ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required