Which of the Following Statements Is True

question 59

Multiple Choice

Which of the following statements is true?

• A)Net exposure refers to the degree to which a bank is net long (negative) or net short (positive) in a given currency.
• B)Gross exposure refers to the degree to which a bank is net long (negative) or net short (positive) in a given currency.
• C)Net exposure refers to the degree to which a bank is net long (positive) or net short (negative) in a given currency.
• D)Gross exposure refers to the degree to which a bank is net long (positive) or net short (negative) in a given currency.

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Definitions:

NPV

Net Present Value, a calculation used to assess the profitability of an investment by discounting future cash flows to their present value.

Cash Flow

The total amount of money being transferred into and out of a business, affecting the company's liquidity, operations, and financial health.

NPV

Net Present Value; a method used in capital budgeting to evaluate the profitability of an investment or project.

IRR

Stands for Internal Rate of Return, a financial metric used to estimate the profitability of potential investments.