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Options
-
The NAV of the scheme in Indian Rupees will appreciate
Correct answer
- B
The NAV of the scheme in Indian Rupees will depreciate
- C
No impact on the fund as its investing in stocks and not currency
Why this is the answer
If the US Dollar appreciates against the Indian Rupee, the value of the international investment in US stocks will increase in terms of Indian Rupees, thus causing the NAV of the scheme to appreciate. This occurs because the Indian investor is holding an asset denominated in US Dollars, so the value of the investment in rupee terms rises when the dollar strengthens.
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