How Would You Characterize the FI's Risk Exposure to Fluctuations

question 9

Multiple Choice

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.

---

Definitions:

Fundamental Frequency

The lowest frequency of a periodic waveform, representing the pitch of a sound or a signal.

Fourier Analysis

A mathematical method used to break down functions or signals into sinusoids of different frequencies, providing a way to study frequency components.

Complex Tone

A sound signal that includes multiple frequencies, often with a fundamental frequency and its harmonics.

Oval Window

A membrane-covered opening that leads from the middle ear to the cochlea of the inner ear, playing a crucial role in the process of hearing.