A Central Bank's Balance Sheet Will Categorize the Following as Liabilities

question 99

Multiple Choice

A central bank's balance sheet will categorize the following as liabilities:

• A) currency.
• B) loans.
• C) securities.
• D) foreign exchange reserves.

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Definitions:

Exchange Gains/Losses

The financial result stemming from the fluctuation in exchange rates affecting the value of foreign currency transactions and holdings.

Strengthening Currency

A currency that is increasing in value compared to another currency, often due to improved economic indicators or increased demand.

Exchange Gain

A financial gain resulting from a favorable change in exchange rates affecting the value of foreign-currency-denominated assets or liabilities.

Current-Rate Method

A method used in translating the financial statements of foreign subsidiaries, where all assets and liabilities are translated at the current exchange rate.