An Indian exporter has entered into a sale transaction of pulses for $20,000 for which the payment will be given after two months. If the exporter expects the USD price to fall within two months, calculate his profit if he hedges the risk through forex option as under: USD/INR spot buying rate is 82.50 USD/INR Future 2 months 84.00 Spot rate afterwo months is 83.00
An Indian exporter has entered into a sale transaction of pulses for $20,000 for which the payment will be given after two months. If the exporter expects the USD price to fall within two months, calculate his profit if he hedges the risk through forex option as under: USD/INR spot buying rate is 82.50 USD/INR Future 2 months 84.00 Spot rate afterwo months is 83.00
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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
Transcribed Image Text:An Indian exporter has entered into a sale transaction of pulses for $20,000 for which the payment will be given after two months. If the exporter expects the USD price to fall within two months,
calculate his profit if he hedges the risk through forex option as under:
USD/INR spot buying rate is 82.50
USD/INR Future 2 months
84.00
Spot rate afterwo months is 83.00
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