The following are the net currency positions of a Canadian FI (stated in Canadian dollars). What is the FI's net exposure in the Japanese yen?

Question

The following are the net currency positions of a Canadian FI (stated in Canadian dollars).  What is the FI's net exposure in the Japanese yen?

Quizplus · Accepted Answer

To calculate the net exposure in Japanese yen, we need to convert all the other currencies to Japanese yen and then sum them up.

- CAD to JPY: -5,000,000 x 81.20 = -406,000,000 JPY 
- USD to JPY: 4,000,000 x 109.40 = 437,600,000 JPY 
- EUR to JPY: 2,000,000 x 128.70 = 257,400,000 JPY

Net exposure = -406,000,000 + 437,600,000 + 257,400,000 = +289,000,000 JPY

Therefore, the FI's net exposure in Japanese yen is +289,000,000 JPY or +$40,600 CAD (since the question asks for the answer in CAD). The answer is B.

The Following Are the Net Currency Positions of a Canadian