You are given the following information:
Spot rate: Rupees 44.0000 = $1
Inflation rates: US – 3%, India – 9%
(a) Calculate 3 month forward USD INR rate.
(b) If 3 month forward rate: Kenyan Schilling 80 = $1
Calculate the 3 month INR KES forward rate.
(Ans.: USD INR 44.6551 and INR KES 1.7915)
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