How may a U.S. bank keep its balance sheet entirely in U.S. dollars?

Question

Quizplus · Accepted Answer

A U.S. bank can keep its balance sheet entirely in U.S. dollars by using currency swaps, which involve exchanging one currency for another and then exchanging them back at a later date at a pre-agreed rate. This allows the bank to effectively hedge against foreign currency fluctuations and maintain their balance sheet in U.S. dollars. The other options, such as selling financial futures or buying put/call options, involve speculation on currency movements and may not be as effective in keeping the balance sheet in U.S. dollars.

How May a U