In evaluating the risk-weighted asset value of foreign exchange forward contracts, the value of the current exposure can be either positive or zero.

Question

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The current exposure of a foreign exchange forward contract can either be positive or zero, depending on the current market value of the contract. If the current market value is positive, it represents a current exposure, and if it is zero, there is no current exposure. The risk-weighted asset value of the contract takes into account this current exposure.

In Evaluating the Risk-Weighted Asset Value of Foreign Exchange Forward