14-38 a Positive Net Exposure Position in FX Implies That

question 12

Multiple Choice

14-38 A positive net exposure position in FX implies that the FI is

• A)net long in a currency and exposed to depreciation of the foreign currency.
• B)net short in a currency and exposed to depreciation of the foreign currency.
• C)net long in a currency and exposed to appreciation of the foreign currency.
• D)net short in a currency and exposed to appreciation of the foreign currency.
• E)neither long nor short in a currency.

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Definitions:

Base-Rate Error

A cognitive bias where people misjudge the likelihood of an event by ignoring general prevalence.

Availability Heuristic

An intuitive thinking process that leverages readily available examples to evaluate a specific topic, concept, approach, or decision.

Functional Fixedness

A cognitive bias that limits a person to using an object only in the way it is traditionally used, hindering problem-solving.

Attention Deficit Disorder

A neurodevelopmental disorder characterized by patterns of attention difficulty, hyperactivity, and impulsiveness.