Today, You Sell GBP 5,000,000

question 304

Multiple Choice

Today, you sell GBP 5,000,000.00 to a customer against JPY for spot value. Tomorrow, the customer defaults. What is your exposure called?

• A) Replacement risk
• B) Settlement risk
• C) Legal risk
• D) Basis risk

---

Definitions:

Compensation and Benefits

Compensation and benefits refer to the salary, wages, and additional perks or rewards provided by an employer to its employees in exchange for their services.

Human Resource Management

The strategic approach to the effective management of people in a company or organization to help their businesses gain a competitive advantage.

Group Insurance

A type of insurance plan that covers a defined group of people, typically employees of a business, offering benefits due to sickness, disability, or death.