Forex And Interest Rates Illustration 7
From the following data decide on the best alternative for investing INR 7 million for a temporary period of 3 months on a risk-free basis. Ignore transaction costs.
|
Currency |
Spot |
3 month forward |
Interest Rates |
| INR |
|
|
6.00% |
| USD INR |
44. |
44.20 |
4.50% |
| EUR INR |
61. |
61.18 |
5.00% |
| GBP INR |
92. |
92.17 |
5.50% |
(Ans.: 105,000, 110,926, 108,413, 109,363. Invest in USD)
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