Assume an Australian FI Has US$100 000 in Assets and US$200

question 55

Multiple Choice

Assume an Australian FI has US$100 000 in assets and US$200 000 in liabilities. Further, the FI has bought US$40 000 and sold US$20 000. What is the net foreign asset of the Australian FI?

• A) -US$100 000
• B) -US$80 000
• C) US$80 000
• D) US$100 000

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Definitions:

Operation of Law

Changes in legal status or rights that occur automatically due to existing legal rules, rather than through the action of any party.

Mutual Agreement

A concord reached by all parties involved, based on shared terms and conditions, often formalized through a contract.

Secured Lending

The practice of issuing loans backed by collateral, providing the lender with security in case of borrower default.

Collateral

An asset offered by a borrower to secure a loan or credit, which can be seized by the lender if the borrower fails to repay according to the terms of the loan.