Forex And Interest Rates Illustration 4
From the following data decide on the best alternative for investing INR 8 Million for a temporary period of 6 months on a risk-free basis. Ignore transaction costs.
|
Currency |
Spot |
6 month forward |
Interest Rates |
| INR |
|
|
5.75% – 6.00% |
| USD INR |
45.8830/45.8860 |
46.2330/46.2360 |
4.25% – 4.50% |
| EUR INR |
62.2545/62.2575 |
62.5545/62.5575 |
4.75% -5.00% |
| GBP INR |
91.4750/91.4780 |
91.6750/91.6780 |
5.25% – 5.50% |
(Ans.: 57,500, 57,946, 57,268, 56,920. Invest in USD)
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