Queen Ltd., an Indian company, has an export exposure of ¥ 100 lakh value at September end. Yen is not directly quoted against rupee. The current spot rates are INR/USD = 62.685 and JPY/USD = 194.625. It is estimated tha
CS Professional · Financial, Treasury and Forex Management · PYQS · June 2014
Queen Ltd., an Indian company, has an export exposure of ¥ 100 lakh value at September end. Yen is not directly quoted against rupee. The current spot rates are INR/USD = 62.685 and JPY/USD = 194.625. It is estimated that Yen will depreciate to 216 level and rupee to depreciate against dollar to 64.50. Forward rate for September, 2013 was JPY/USD = 206.025 and INR/USD = 64.335. If the spot rate on 30 th September, 2013 was eventually INR/USD = 64.17 and JPY/USD = 206.775, is the decision to take forward cover justified?
Topics: International Finance
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