Practice Foreign Exchange Questions and Answers

• An Indian exporter receives a payment of USD 50,000 when the exchange rate is ₹83/USD. At the year-end, the rate drops to ₹80/USD and the amount is sti...
• A foreign subsidiary reports its accounts in USD. On consolidation, the holding company translates the figures into INR. Which rate should be used for inco...
• Beta Ltd., an Indian company, operates a 100% subsidiary in the UAE. The subsidiary manufactures and sells products only in the Gulf region, incurs costs a...
• A company revalues its foreign currency receivable at the closing rate on balance sheet date. Under which Ind AS is this required?
• An Indian company receives a large export order payable in USD after 6 months. The management fears rupee appreciation in this period. To hedge the risk, t...
• An importer based in India has a large payment to make in EUR after 2 months. To reduce exchange rate risk, the firm buys a European Call Option with a str...
• A firm in India has to pay €5 million in 3 months. They expect the rupee to depreciate against the euro. Which of the following hedging tools will best p...
• ParentCo has a net investment in foreign subsidiary of USD 50m. It borrows USD 30m to hedge part of the net investment. The USD loan is designated as a hed...
• A company imports machinery payable in USD after 6 months. If the liability remains unpaid at year-end and the exchange rate has increased, how should the ...