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    Question

    A firm receives an export payment in USD. If the rupee

    appreciates before conversion, what is the effect on the firm’s income?
    A Increase in rupee value of receivable Correct Answer Incorrect Answer
    B Decrease in rupee realization Correct Answer Incorrect Answer
    C No impact on income Correct Answer Incorrect Answer
    D Additional interest benefit Correct Answer Incorrect Answer
    E Inflation adjustment Correct Answer Incorrect Answer

    Solution

    If the rupee appreciates (e.g., ₹83 → ₹81/USD), fewer rupees will be received for each dollar. Hence, rupee realization decreases, which may impact exporter revenue.

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