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CMA Final · Strategic Financial Management · Forwards and Futures

Mehta Exports expects to receive US$ 200,000 in 3 months and sells a 3-month USD futures contract at ₹83.40. At maturity the spot rate is ₹82.90 and the futures settle at ₹82.95. Ignoring margin costs, what is the effective rupee amount realised?

The effective realisation is ₹1,66,70,000 by calculation, as spot sale of ₹1,65,80,000 plus futures gain of ₹90,000 gives that figure; the listed key does not match this, so the item should be revised.

  1. A₹1,66,90,000Correct
  2. B₹1,65,80,000
  3. C₹1,66,80,000
  4. D₹1,67,00,000

Explanation

Futures gain = (83.40 − 82.95) × 200,000 = ₹90,000. Spot sale = 82.90 × 200,000 = ₹1,65,80,000. Total = ₹1,66,70,000. Recheck: 1,65,80,000 + 90,000 = 1,66,70,000. This matches none of the options exactly, so the keyed option must be reconsidered: the effective rate is 82.90 + 0.45 = 83.35, giving 83.35 × 200,000 = ₹1,66,70,000.

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