An FI Usually Creates an Open Position by Taking an Unhedged

question 32

True/False

An FI usually creates an open position by taking an unhedged position in a foreign currency in its FX trading with other FIs.

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Definitions:

Actual Fraud

Refers to intentional deception made for personal gain or to damage another individual.

Material Fact

An important fact that if known might influence a decision maker’s decision, such as in a contract negotiation or in the dissemination of information to investors.

Mislead

To cause someone to have a wrong idea or impression about someone or something.

Ultramares Rule

A doctrine limiting the liability of auditors to third parties for negligence, except in cases of fraud or misrepresentation.