The one-year forward exchange rate is Rupees 45/$. If the one-year interest rate in the United States is 5% and in India is 8%, what is the spot exchange rate so as to preclude arbitrage?
A) Rupees 43.23/$
B) Rupees 43.75/$
C) Rupees 43.99/$
D) Rupees 44.32/$
Correct Answer:
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