A Balance Sheet Hedge Requires That the Amount of Exposed

question 34

Multiple Choice

A balance sheet hedge requires that the amount of exposed foreign currency assets and liabilities:

• A) have a 2:1 ratio of assets to liabilities.
• B) have a 2:1 ratio of liabilities to assets.
• C) have a 2:1 ratio of liabilities to equity.
• D) be equal.

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Definitions:

Antagonists

These are substances or muscles that counteract or oppose the function or action of another—for example, a muscle that opposes the action of another muscle or a drug that blocks receptors for neurotransmitters.

Endorphins

Neurotransmitters produced by the brain that act as natural painkillers and are also associated with feelings of pleasure and euphoria.

Control

The power to influence or direct people's behavior or the course of events.

Parkinson's Disease

A neurodegenerative disorder that affects movement, often including tremors, stiffness, and slowing of motion.