The Trading of Forward FX Contracts by FX Dealers

question 102

Multiple Choice

The trading of forward FX contracts by FX dealers:

• A)exposes them to FX risk
• B)exposes them to interest rate risk
• C)requires they borrow funds to invest in securities in the currencies they supply
• D)requires they borrow funds in the currencies they supply
• E)requires they predict future movements in FX spot prices.

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Definitions:

Epicardium

A thin layer of tissue that forms the outermost part of the heart's wall.

Depolarization

The process in which the resting membrane potential of a cell becomes less negative, making the cell more likely to fire an action potential.

Pacemaker Cells

Specialized heart cells that generate and regulate the heart's rhythm.

Afterload

The force the heart must overcome to pump blood during the contraction phase.