The following are the net currency positions of a U.S.FI (stated in U.S.dollars).

\begin{array} { | l | l | r | r | r | } \hline \text { Currency } & \text { Assets } & \text { Liabilities } & \text { FX Bought } & \text { FX Sold } \\\hline \text { British pound } & 24,600 & 70,000 & 170,400 & 321,000 \\\hline \text { Yen } & 31,000 & 20,400 & 250,000 & 220,000 \\\hline \text { Swiss franc } & 10,200 & 9,800 & 8,000 & 10,800 \\\hline\end{array}

How would you characterize the FI's risk exposure to fluctuations in the Swiss franc/dollar exchange rate?
A)The FI is net short in the franc and therefore faces the risk that the franc will rise in value against the U.S.dollar.
B)The FI is net short in the franc and therefore faces the risk that the franc will fall in value against the U.S.dollar.
C)The FI is net long in the franc and therefore faces the risk that the franc will fall in value against the U.S.dollar.
D)The FI is net long in the franc and therefore faces the risk that the franc will rise in value against the U.S.dollar.
E)The FI has a balanced position in the Swiss franc.

On May 31, 2016, the Exchange Rate of U

Multiple Choice

Correct Answer:VerifiedUnlock this answer nowGet Access to more Verified Answers free of chargeAccess For Free

Correct Answer:
Verified
Unlock this answer now
Get Access to more Verified Answers free of charge