A positive net exposure position in FX implies that the FI is
A)net long in a currency and exposed to depreciation of the foreign currency.
B)net short in a currency and exposed to depreciation of the foreign currency.
C)net long in a currency and exposed to appreciation of the foreign currency.
D)net short in a currency and exposed to appreciation of the foreign currency.

Question

Quizplus · Accepted Answer

A positive net exposure position means the financial institution (FI) is net long in a currency, which exposes it to the risk of depreciation of that foreign currency.

A Positive Net Exposure Position in FX Implies That the FI