Advise the VEN whether it should adopt Forward Cover or Money Market Cover? Consider all calculations up to 2 decimal points for accuracy.

Forward Cover Amount Payable under Forward Cover ($10,00,000 × ₹ 87.90) = 8,79,00,000 Money Market Hedge To pay $ after 3 months' company shall require borrowing in ₹ and translate to $ and then deposit in $. For payment of $10,00,000 in 3 months @ 4.00% interest p.a. the amount required to be deposited now ($10,00,000/1.01) = $9,90,099.01 With a spot rate of 85.90 the ₹ loan needed will be = 8,50,49,504.96 Loan repayable after 3 months @ 8.00% p.a. interest will be - 8,50,49,504.96 (1.02) = 8,67,50,495.06 Advise Since outflow of cash shall be least in case of Money Market Hedge hence it should be opted for. The suggested answers provided in these Case Studies includes a variety of potential solutions/ alternative points where applicable. This is intended to assist students by offering multiple perspectives and approaches to problem-solving.