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##### 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 \$.

Solution

(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 ...

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