The Following Are the Net Currency Positions of a U

question 71

Multiple Choice

The following are the net currency positions of a U.S.FI (stated in U.S.dollars) . $\begin{array}{lrrrr}\text { Currency} &\text { Assets } & \text { Liabilities } & \text { FX Bought } & \text { FX Sold } \\\text { British pound} &24,600 & 70,000 & 170,400 & 321,000 \\\text { Yen} &31,000 & 20,400 & 250,000 & 220,000 \\\text { Swiss franc} &10,200 & 9,800 & 8,000 & 10,800\end{array}$ 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.

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Definitions:

Multifactorial Inheritance

A pattern of inheritance in which a trait is influenced by both genes and environmental factors.

Genotype

An individual’s genetic makeup.

Phenotype

An individual’s actual characteristics.

Motor Neurons

Specialized neurons that initiate and conduct impulses to muscles and glands, facilitating movement and secretion.