Cross Currency

AFM

Hi Sir, Good day! I have solved in the following manner, please correct me if the steps are wrong 1) Sold USD bought EUR at $1=EUR 1.44 We will have $1000,000 *1.44= EUR14,40,000 2) Sold EUR and bought USD from market at ask price of 1.445 we will have 14,40000/1.445= $996539.79. Loss = sold 996529.79-1000000= $3460.21 3) Loss in INR using ask rate as we are the dealer and would sell $ at higher rate at 31.45 $3460.21*31.45= 108823.60 [Video Time Stamp: 17:54] Video Details ------------- Advanced Financial Management - AFM Foreign Exchange Exposure and Risk Management #48. Illustration # 3 - Gain/Loss

Varshini Rao

CA Final

★ 1K+

09-Apr-26 14:44

Answers (1)

Hi Varshini, This is correct. But i think i explained in the video you will have to buy back 1 Mio USD and for that you will require more Euro ICAI has solved questions line what i mentioned above

Sriram Somayajula

Admin

09-Apr-26 17:11