Mix Of AFM And Interest Rate Illustration 1


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Mix Of AFM And Interest Rate Illustration 1

GBP rate in terms of Indian Rupees is 80 in spot market. Pound commands 2.5% premium per annum.

(a)    Calculate 6 months forward rate

(b)   If interest rate in India for 6 months deposit is 8% per annum. Calculate interest rate per annum in Britain (for 6 months deposits)

(Ans.: (a) GBP INR 81. (b) 5.43%)

 


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