Matching the Foreign Currency Book Does Not Protect the FI

question 31

Multiple Choice

Matching the foreign currency book does not protect the FI from:

• A)sovereign country risk
• B)interest rate risk
• C)liquidity risk
• D)foreign exchange risk

---

Definitions:

Data Mining

Sorting through large amounts of historical data to uncover systematic patterns that can be used as the basis of a trading strategy.

Systematic Patterns

Repetitive or predictable behaviors observed within a system, market, or set of data, which can sometimes be exploited for forecasting or strategic purposes.

Historical Data

Previously recorded information and data points regarding an asset's performance, prices, volumes, and other relevant financial metrics.

Liquidity Risk

The risk that an entity may not be able to buy or sell an asset quickly enough without causing a significant movement in its price.