The Following Are the Net Currency Positions of a U

question 25

Multiple Choice

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 yen/dollar exchange rate?

• A)The FI is net short in the yen and therefore faces the risk that the yen will rise in value against the U.S.dollar.
• B)The FI is net short in the yen and therefore faces the risk that the yen will fall in value against the U.S.dollar.
• C)The FI is net long in the yen and therefore faces the risk that the yen will fall in value against the U.S.dollar.
• D)The FI is net long in the yen and therefore faces the risk that the yen will rise in value against the U.S.dollar.
• E)The FI has a balanced position in the Japanese yen.

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Definitions:

Carl Jung

A Swiss psychiatrist and psychoanalyst who founded analytical psychology, known for his theories of the collective unconscious and archetypes.

Psychodynamic Theories

Theories developed by Freud’s followers but usually differing somewhat from Freud’s original theories.

Object Relations Perspective

A theory in psychoanalysis focusing on relationships with others, suggesting that the internalization of these relationships impacts individual psyche and behavior.

Psychodynamic Therapy

A therapeutic approach focusing on unconscious processes as they are manifested in a person's present behavior, aiming to uncover unresolved conflicts.