14-62 How Would You Characterize the FI's Risk Exposure to Fluctuations

question 63

Multiple Choice

14-62 How would you characterize the FI's risk exposure to fluctuations in the British pound to dollar exchange rate?

• A)The FI is net short in the British pound and therefore faces the risk that the British pound will rise in value against the U.S.dollar.
• B)The FI is net short in the British pound and therefore faces the risk that the British pound will fall in value against the U.S.dollar.
• C)The FI is net long in the British pound and therefore faces the risk that the British pound will fall in value against the U.S.dollar.
• D)The FI is net long in the British pound and therefore faces the risk that the British pound will rise in value against the U.S.dollar.
• E)The FI has a balanced position in the British pound.

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Definitions:

Vygotsky

A Russian psychologist who proposed the sociocultural theory of cognitive development, emphasizing the role of social interaction in learning.

Formal Operations

In Piaget's theory, the cognitive development stage (starting around age 12) where an individual gains the ability to think abstractly, reason logically, and form hypotheses.

Hypothetical Questions

Questions based on imagined scenarios or conditions, used to explore reactions or decisions in speculative situations.

Erik Erikson

A developmental psychologist known for his theory on the psychosocial development of human beings across eight stages from infancy to adulthood.