Renu lives in US and wishes to send money to her family staying in India the next month. She expects the Dollar/Rupee exchange rate to change from 73Rupees/ dollar to 75 Rupees/dollar . At which rate she would be better of-

75 Rupees/$

The correct answer is option 2: 75 Rupees/$

With same 1$ she is able to get 2 rupees more (75-73).

When Renu sends money to India:

• If she sends money when the exchange rate is 73 Rupees per dollar, her family will receive 73 Rupees for every dollar she sends.
• If she sends money when the exchange rate is 75 Rupees per dollar, her family will receive 75 Rupees for every dollar she sends.

In the scenario where the exchange rate is 75 Rupees per dollar, her family will receive more Rupees for each dollar she sends. This means they will receive more Rupees overall when the exchange rate is higher.