Calculate forward rate foreign exchange

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Freelance Consultant
51 Points Posted on 02 November 2012

 

A customer expecting inward remittance of USD 5000 one month later wants his bank to give a one month forward rate

                      Interbank spot rate for USD is 49.89/50.11

                      One month deposit rate in India is 5%

                      One month funds can be borrowed in USA at 4%

       What will the bank quote?

Please help 

KINDLY send the calculation sheet please

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On 02 November 2012 at 18:06 Report
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CA
1474 Points Posted on 02 November 2012

ans.50.36

1 Reply
On 02 November 2012 at 18:37
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CA (Ahmedabad Bhilwara Chittorgarh)
2932 Points Posted on 02 November 2012

 

50.36971154

 

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On 02 November 2012 at 18:47
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Freelance Consultant
51 Points Posted on 02 November 2012

Please advise the working sheet and formula, Sir 

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On 02 November 2012 at 18:51
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CA (Ahmedabad Bhilwara Chittorgarh)
2932 Points Posted on 02 November 2012

 

 

 

 

49.89 +5% /1.04= 50.3697

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On 02 November 2012 at 19:01
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Freelance Consultant
51 Points Posted on 04 November 2012

Dear All

Te correct forward rate is 49.94

Thanks for participation

 

Awni Ranjan

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On 04 November 2012 at 06:21

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