An FI that finances a euro (€) loan with Canadian dollar ($) deposits is exposed to

Name: An FI that finances a euro (€) loan with Canadian dollar ($) deposits is exposed to
Brand: Quizplus
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Question

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The FI is exposed to foreign exchange risk because it has to convert Canadian dollars into euros to fund the loan. If the value of the euro depreciates relative to the Canadian dollar, the FI will receive fewer euros than anticipated, resulting in lower interest income or even losses.

An FI That Finances a Euro (€) Loan with Canadian