14-42 the FI Is Acting as a Hedger When It

question 47

Multiple Choice

14-42 The FI is acting as a hedger when it

• A)buys or sells currency to balance the FI's net exposure.
• B)takes a nonzero net position in a particular currency.
• C)processes an exporter's transaction in a foreign currency.
• D)makes a market in a currency.
• E)advises customers on their international business.

---

Definitions:

Frequency Distribution

A mathematical function showing the number of instances in which a variable attains each of its possible values.

Relative Frequency

The ratio of the number of times a particular value appears in a dataset to the total number of observations.

Categorical Data

Data that can be divided into groups or categories that are not numerically ordered.

Relative Data

Data that is compared to a certain reference point or to other data in order to assess its value or importance in relative terms.