To be immunized against foreign currency and foreign interest rate risk, an FI should match both the size and maturities of its foreign assets and foreign liabilities.

Question

Quizplus · Accepted Answer

Matching the size and maturities of foreign assets and liabilities helps to offset potential losses from changes in currency and interest rates. This reduces the FI's exposure to foreign currency and interest rate risk.

To Be Immunized Against Foreign Currency and Foreign Interest Rate