A positive net exposure position in FX implies that the FI is net:
A)long in a currency and exposed to depreciation of the foreign currency
B)short in a currency and exposed to depreciation of the foreign currency
C)long in a currency and exposed to appreciation of the foreign currency
D)short in a currency and exposed to appreciation of the foreign currency

Question

Quizplus · Accepted Answer

A positive net exposure position in FX means the financial institution (FI) holds more foreign currency assets than liabilities, effectively being net long in that currency. This position exposes the FI to the risk of the foreign currency depreciating, as the value of their assets would decrease relative to their base currency.

A Positive Net Exposure Position in FX Implies That the FI