You expect that the inr will depreciate against the dollar


You expect that the INR will depreciate against the dollar from its spot rate of $.0.15 to $.0.125 in 60 days. The following interbank lending and borrowing rates exist:

                                           Lending Rate             Borrowing Rate

      U.S. dollar                           1.0%                              2.5%

      INR                                     12.0%                            15.0%

How can you profit from the above given information. Estimate the profits that could be earned given your maximum borrowing limits are either $1,500 or INR 100,000?

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Financial Management: You expect that the inr will depreciate against the dollar
Reference No:- TGS01156050

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