Assume an FI Holds US$250 000 in Assets and US$350

question 15

Multiple Choice

Assume an FI holds US$250 000 in assets and US$350 000 in liabilities.Which of the following statements is true?

• A)The FI has a net long in US$.
• B)The FI has a net short in US$.
• C)The FI has a net exposure of US$100,000.
• D)The FI has a net exposure of -US$100,000.

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Definitions:

Callable

Describes a financial security that the issuer has the right to redeem or 'call back' before its maturity date, often at a predetermined price.

Preferred Stock

A class of ownership in a corporation with a higher claim on assets and earnings than common stock, typically with dividend payments that are prioritized over those of common stock.

Stock Listing

The inclusion of a company's shares on a stock exchange where they can be bought and sold by investors.

P/E

The price-to-earnings ratio, measuring a company's current share price relative to its per-share earnings.