A negative net exposure position in FX implies that the FI is
A)net long in a currency and exposed to depreciation of the foreign currency.
B)net short in a currency and exposed to depreciation of the foreign currency.
C)net long in a currency and exposed to appreciation of the foreign currency.
D)net short in a currency and exposed to appreciation of the foreign currency.
E)neither long nor short in a currency.

Question

Quizplus · Accepted Answer

A negative net exposure position means the FI is net short, which exposes it to losses if the foreign currency appreciates.

A Negative Net Exposure Position in FX Implies That the FI