Answer to Question #137235 in Accounting for Tanishka

Question

In a trading scenario where E.R. in between USD and INR is 1$=75₹, an Indian trader who’s industry is expert in the production of A-class quality tea has signed an export contract with an American trader. This involves transaction of 1,80,000$ by foreign trader to Indian trader. By analysing this situation kindly explain the concept of hedging with the point of view of both the traders means how they can save themselves from currency risk associated with this trade by using forward market hedging. Suppose the Indian trader is expecting a depreciation of USD(1$=70₹) and US trader is expecting an appreciation of INR (1$=80₹).

Answer 1

Dear Tanishka, your question requires a lot of work, which neither of our experts is ready to perform for free. We advise you to convert it to a fully qualified order and we will try to help you. Please click the link below to proceed: Submit order