Which of the Following Statements Is True

question 58

Multiple Choice

Which of the following statements is true?

• A)By directly matching its foreign asset and liability book, an FI can lock in a positive return on profit spread if exchange rates rise over the investment period.
• B)By directly matching its foreign asset and liability book, an FI can lock in a positive return on profit spread if exchange rates fall over the investment period.
• C)By directly matching its foreign asset and liability book, an FI can lock in a positive return on profit spread whichever direction exchange rates change over the investment period.
• D)By directly matching its foreign asset and liability book, an FI holds a neutral position, that is, earnings equalling zero, whichever direction exchange rates change over the investment period.

---

Definitions:

Production Stable

Production Stable indicates a stage in manufacturing where output levels are consistent, quality control measures are effective, and operations run smoothly.

Flexible Production Lines

Manufacturing setups that can quickly be adapted to produce different products or adjust production volumes in response to market demands.

Production Rate

The speed or efficiency at which goods are manufactured or services are delivered within a specified period.

Supply of Product

The total amount of a product or service that is available for purchase at any given time.