-
investors investing in fixed term debt. instruments already know what they will get & when they will get.
-
investors in equities etc with no fixed term plans , here they don’t know exactly the return & when they will get.
in both the cases , currency rate is not possible to predict .
suppose an FII invests $1 million at the rate of 66 (i.e. 6.6 crores ) in t-bills & after one year the investment has returned 6% but the USD is 67.5 .
is there any kind of forwards , future or outward remittance contract banks offer that the rate at which USD came inward & rate at which USD will go outward are the same ?