The following are the net currency positions of a U.S. FI (stated in U.S. dollars). Note: Net currency positions are foreign exchange bought minus foreign exchange sold restated in U.S. dollar terms. What is the portfolio weight of the Japanese yen in this FI's portfolio of foreign currency?

Question

The following are the net currency positions of a U.S. FI (stated in U.S. dollars). Note: Net currency positions are foreign exchange bought minus foreign exchange sold restated in U.S. dollar terms.  What is the portfolio weight of the Japanese yen in this FI's portfolio of foreign currency?

Quizplus · Accepted Answer

To find the portfolio weight of a particular currency in the FI's portfolio, we need to divide the net position of that currency by the sum of the net positions of all currencies.

Net currency position of Japanese yen = $1,504,000 
Sum of net positions of all currencies = $1,997,000 (calculated by adding the absolute values of all the net positions)

Portfolio weight of Japanese yen = ($1,504,000 / $1,997,000) x 100% = 75.20%

Therefore, the answer is C, +75.20 percent.

The Following Are the Net Currency Positions of a U