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What is the total cost of your loan

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Question - FINANCIAL MANGEMENT unit - Assume you are in India and borrowed 750,000 Rs. from one of your friends who lines in Australia. Suppose the spot exchange rate at the time borrowing was Rs52/$ and you promised to repay the loan after six months with a forward currency rate of Rs56/$ without any interest. What is the total cost of your loan and present your answer as a rate of interest per annum? Briefly explain the methods of minimising currency exchange risk on foreign investments.

Reference no: EM132999588

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