Read the case study and answer the following.
The rupee rose by 3 paise to settle at 72.94 (provisional) against the US dollar on Monday, extending its gains for the fifth straight session despite heavy selling in domestic equity market. At the inter-bank Forex market, the rupee opened at 72.95 against the American currency and hit an intraday high of 72.89 and a low of 72.96 in day trade. It finally finished at 72.94, higher by 3 paise over its last close. On Friday, the rupee had settled at 72.97 against the American currency. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies advanced 0.10 percent to 90.32. The rupee has managed to hold its fort around the 72.90 to 73 levels, but given the sell-off in equities and the likelihood of a rebound in the dollar index, we see the trend tilting slightly towards depreciation going forward.
"Rupee rose by 3 paise to settle at 72.94 against US dollar." What would be the value of rupee against US dollar before this change ?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → 72.97
Given:
Rupee after the rise = 72.94 per US dollar
Rise = 3 paise = 0.03
When the rupee rises, one dollar costs fewer rupees. So the earlier figure was higher by 3 paise:
72.94 + 0.03 = 72.97
The case study also says the rupee had settled at 72.97 on Friday.