FX Risk Exposure of an FI Essentially Relates to Which

question 37

Multiple Choice

FX risk exposure of an FI essentially relates to which of the following activities?

• A)Purchase and sale of foreign currencies to allow customers to participate in and complete international commercial trade transactions.
• B)Purchase and sale of foreign currencies to allow customers to take positions in foreign real and financial investments.
• C)Purchase and sale of foreign currencies for hedging purposes to offset customer exposure in any given currency.
• D)Purchase and sale of foreign currencies for speculative purposes through forecasting or anticipating future movements in FX rates.
• E)None of the options.

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Definitions:

Duties Under Tort Law

Obligations recognized by law for individuals or entities to avoid causing harm or injury to others, breach of which may result in liability.

Agent

A person authorized to act on behalf of another, known as the principal, in business transactions or legal matters.

Principal

The main party to a transaction or contract who has authorized another party (agent) to act on their behalf.

Duty Of Obedience

The requirement for directors, officers, and agents of a corporation to act within the scope of their authority and in the best interest of the corporation.