Interbank rate US Dollar
Spot USD 1 = Rs. 65.2000/2575
1 Month 3500/3600
2 Months 5500/5600
3 Months 8500/8600
4 Months 1.1500/1.1600
5 Months 1.3500/1.3600
6 Months 1.5500/1.6600
Transit period is 25 Days. All forward Rates are for Fixed Delivery Exchange Margin is 0.10%.
From the above information, calculate :
1. Ready Bill Buying Rate
a. 65.1350
b. 65.1850
c. 65.2350
d. 66.2825
Ans - a
2. 2 Months Forward Buying Rate for Demand Bill
a. 65.6350
b. 65.6850
c. 65.7350
d. 66.7825
Ans - b
3. 3 Months Forward Buying Rate for Demand Bill
a. 65.5350
b. 65.6850
c. 65.7850
d. 65.9850
Ans - d
4. 4 Months Forward Buying Rate for Demand Bill
a. 65.2375
b. 65.7375
c. 66.2825
d. 66.5825
Ans - c
5. Ready Rate for 60 Days Usance Bill
a. 65.6350
b. 65.6850
c. 65.7350
d. 66.7825
Ans - b
6. 2 Months Forward Buying Rate for 60 Days Usance Bill
a. 65.2375
b. 65.7375
c. 66.2825
d. 66.5825
Ans - c
7. 1 Month Forward Buying Rate for 30 Days Usance Bill
a. 65.6350
b. 65.6850
c. 65.7350
d. 66.7825
Ans - b
8. 2 Months Forward Buying Rate for 30 Days Usance Bill
a. 65.5350
b. 65.6850
c. 65.7850
d. 65.9850
Ans - d
Solution :
1. Ready Bill buying Rate
Dollar / Rupee market spot buying rate = Rs. 65.2000
Less: Exchange margin at 0.10% On Rs. 65.2000 = Rs. 0.06520
= 65.2000 - 0.06520
= Rs. 65.13480
Rounded off to nearest multiple of 0.0025, the rate quoted for ready bill buying is Rs. 65.1350
2. 2 Months Forward Buying Rate
Dollar / Rupee (market) spot buying rate = Rs. 65.2000
Add: Forward premium for 2 months (Transit period 25 days and Forward period 2 months, Rounded off to lower month)
= 65.2000 + 0.55000
= Rs. 65.7500
Less: Exchange margin at 0.10% On Rs. 65.7500 = Rs. 0.06575
= 65.7500 - 0.06575
= Rs. 65.68425
Rounded off, the rate quoted for 2 months forward purchase of dollar bill is Rs. 65.6850
3. 3 Months Forward Buying Rate
Dollar / Rupee (market) spot buying rate = Rs. 65.2000
Add: Forward premium for 3 months (Transit period 25 days and Forward period 2 months, Rounded off to lower month)
= 65.2000 + 0.85000
= Rs. 66.0500
Less: Exchange margin at 0.10% On Rs. 66.0500 = Rs. 0.06605
= 66.0500 - 0.06605
= Rs. 65.98395
Rounded off, the rate quoted for 2 months forward purchase of dollar bill is Rs. 65.9850
4. 4 Months Forward Buying Rate
Dollar / Rupee (market) spot buying rate = Rs. 65.2000
Add: Forward premium for 4 months (Transit period 25 days and Forward period 2 months, Rounded off to lower month)
= 65.2000 + 1.15000
= Rs. 66.3500
Less: Exchange margin at 0.10% On Rs. 66.3500 = Rs. 0.06635
= 66.3500 - 0.06635
= Rs. 66.28365
Rounded off, the rate quoted for 2 months forward purchase of dollar bill is Rs. 66.2825
5. Ready Rate for 60 Days Usance Bill
Dollar / Rupee (market) spot buying rate = Rs. 65.2000
Add: Forward premium for 2 months (Transit period 25 days And forward period 2 months, Rounded off to lower month)
= 65.2000 + 0.55000
= Rs. 65.7500
Less: Exchange margin at 0.10% On Rs. 65.7500 = Rs. 0.06575
= 65.7500 - 0.06575
= Rs. 65.68425
Rounded off, the rate quoted for 2 months forward purchase of dollar bill is Rs. 65.6850
6. 2 Months forward rate for 60 days bill
Dollar / Rupee (market) spot buying rate = Rs. 65.2000
Add: Forward premium for 4 months (Transit period 25 days and Forward period 2 months, rounded Off to lower month)
= 65.2000 + 1.15000
= Rs. 66.3500
Less: Exchange margin at 0.10% On Rs. 66.3500 = Rs. 0.06635
= 66.3500 - 0.06635
= Rs. 66.28365
Rounded off, the rate quoted for 2 months forward purchase of dollar bill is Rs. 66.2825
7. 1 Months forward rate for 30 days bill
Dollar / Rupee (market) spot buying rate = Rs. 65.2000
Add: Forward premium for 2 months (Transit period 25 days And forward period 1 month, Rounded off to lower month)
= 65.2000 + 0.55000
= Rs. 65.7500
Less: Exchange margin at 0.10% On Rs. 65.7500 = Rs. 0.06575
= 65.7500 - 0.06575
= Rs. 65.68425
Rounded off, the rate quoted for 2 months forward purchase of dollar bill is Rs. 65.6850
8. 2 Months forward rate for 30 days bill
Dollar / Rupee (market) spot buying rate = Rs. 65.2000
Add: Forward premium for 3 months (Transit period 25 days and Forward period 2 months, rounded Off to lower month)
= 65.2000 + 0.85000
= Rs. 66.0500
Less: Exchange margin at 0.10% On Rs. 66.0500 = Rs. 0.06605
= 66.0500 - 0.06605
= Rs. 65.98395
Rounded off, the rate quoted for 2 months forward purchase of dollar bill is Rs. 65.9850
Spot USD 1 = Rs. 65.2000/2575
1 Month 3500/3600
2 Months 5500/5600
3 Months 8500/8600
4 Months 1.1500/1.1600
5 Months 1.3500/1.3600
6 Months 1.5500/1.6600
Transit period is 25 Days. All forward Rates are for Fixed Delivery Exchange Margin is 0.10%.
From the above information, calculate :
1. Ready Bill Buying Rate
a. 65.1350
b. 65.1850
c. 65.2350
d. 66.2825
Ans - a
2. 2 Months Forward Buying Rate for Demand Bill
a. 65.6350
b. 65.6850
c. 65.7350
d. 66.7825
Ans - b
3. 3 Months Forward Buying Rate for Demand Bill
a. 65.5350
b. 65.6850
c. 65.7850
d. 65.9850
Ans - d
4. 4 Months Forward Buying Rate for Demand Bill
a. 65.2375
b. 65.7375
c. 66.2825
d. 66.5825
Ans - c
5. Ready Rate for 60 Days Usance Bill
a. 65.6350
b. 65.6850
c. 65.7350
d. 66.7825
Ans - b
6. 2 Months Forward Buying Rate for 60 Days Usance Bill
a. 65.2375
b. 65.7375
c. 66.2825
d. 66.5825
Ans - c
7. 1 Month Forward Buying Rate for 30 Days Usance Bill
a. 65.6350
b. 65.6850
c. 65.7350
d. 66.7825
Ans - b
8. 2 Months Forward Buying Rate for 30 Days Usance Bill
a. 65.5350
b. 65.6850
c. 65.7850
d. 65.9850
Ans - d
Solution :
1. Ready Bill buying Rate
Dollar / Rupee market spot buying rate = Rs. 65.2000
Less: Exchange margin at 0.10% On Rs. 65.2000 = Rs. 0.06520
= 65.2000 - 0.06520
= Rs. 65.13480
Rounded off to nearest multiple of 0.0025, the rate quoted for ready bill buying is Rs. 65.1350
2. 2 Months Forward Buying Rate
Dollar / Rupee (market) spot buying rate = Rs. 65.2000
Add: Forward premium for 2 months (Transit period 25 days and Forward period 2 months, Rounded off to lower month)
= 65.2000 + 0.55000
= Rs. 65.7500
Less: Exchange margin at 0.10% On Rs. 65.7500 = Rs. 0.06575
= 65.7500 - 0.06575
= Rs. 65.68425
Rounded off, the rate quoted for 2 months forward purchase of dollar bill is Rs. 65.6850
3. 3 Months Forward Buying Rate
Dollar / Rupee (market) spot buying rate = Rs. 65.2000
Add: Forward premium for 3 months (Transit period 25 days and Forward period 2 months, Rounded off to lower month)
= 65.2000 + 0.85000
= Rs. 66.0500
Less: Exchange margin at 0.10% On Rs. 66.0500 = Rs. 0.06605
= 66.0500 - 0.06605
= Rs. 65.98395
Rounded off, the rate quoted for 2 months forward purchase of dollar bill is Rs. 65.9850
4. 4 Months Forward Buying Rate
Dollar / Rupee (market) spot buying rate = Rs. 65.2000
Add: Forward premium for 4 months (Transit period 25 days and Forward period 2 months, Rounded off to lower month)
= 65.2000 + 1.15000
= Rs. 66.3500
Less: Exchange margin at 0.10% On Rs. 66.3500 = Rs. 0.06635
= 66.3500 - 0.06635
= Rs. 66.28365
Rounded off, the rate quoted for 2 months forward purchase of dollar bill is Rs. 66.2825
5. Ready Rate for 60 Days Usance Bill
Dollar / Rupee (market) spot buying rate = Rs. 65.2000
Add: Forward premium for 2 months (Transit period 25 days And forward period 2 months, Rounded off to lower month)
= 65.2000 + 0.55000
= Rs. 65.7500
Less: Exchange margin at 0.10% On Rs. 65.7500 = Rs. 0.06575
= 65.7500 - 0.06575
= Rs. 65.68425
Rounded off, the rate quoted for 2 months forward purchase of dollar bill is Rs. 65.6850
6. 2 Months forward rate for 60 days bill
Dollar / Rupee (market) spot buying rate = Rs. 65.2000
Add: Forward premium for 4 months (Transit period 25 days and Forward period 2 months, rounded Off to lower month)
= 65.2000 + 1.15000
= Rs. 66.3500
Less: Exchange margin at 0.10% On Rs. 66.3500 = Rs. 0.06635
= 66.3500 - 0.06635
= Rs. 66.28365
Rounded off, the rate quoted for 2 months forward purchase of dollar bill is Rs. 66.2825
7. 1 Months forward rate for 30 days bill
Dollar / Rupee (market) spot buying rate = Rs. 65.2000
Add: Forward premium for 2 months (Transit period 25 days And forward period 1 month, Rounded off to lower month)
= 65.2000 + 0.55000
= Rs. 65.7500
Less: Exchange margin at 0.10% On Rs. 65.7500 = Rs. 0.06575
= 65.7500 - 0.06575
= Rs. 65.68425
Rounded off, the rate quoted for 2 months forward purchase of dollar bill is Rs. 65.6850
8. 2 Months forward rate for 30 days bill
Dollar / Rupee (market) spot buying rate = Rs. 65.2000
Add: Forward premium for 3 months (Transit period 25 days and Forward period 2 months, rounded Off to lower month)
= 65.2000 + 0.85000
= Rs. 66.0500
Less: Exchange margin at 0.10% On Rs. 66.0500 = Rs. 0.06605
= 66.0500 - 0.06605
= Rs. 65.98395
Rounded off, the rate quoted for 2 months forward purchase of dollar bill is Rs. 65.9850
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