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      Question

      On March 03, a saving bank customer in India, requests

      for issue a USD 10,000. The inter-bank currency rates are as under: Spot rate: 1 USD = Rs.85.00 /0.50 Sep forward margin = 0.35 / 0.40 Bank requires an exchange margin of 0.15%. What rate will be quoted and how much amount will be debited to customer's account.
      A 855000 Correct Answer Incorrect Answer
      B 850000 Correct Answer Incorrect Answer
      C 851100 Correct Answer Incorrect Answer
      D 856100 Correct Answer Incorrect Answer
      E cannot be calculated Correct Answer Incorrect Answer

      Solution

      Here TT selling rate should be used and exchange margin will be added, since for the bank, it is a sale transaction. Spot rate selling rate = 85.50 Add margin @ 0.15% = 85.61 Gross amount due from customer = 85.61 x 10000 = 856100

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