A negative 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 negative net exposure means the financial institution is net short in a currency, which means it would benefit from a depreciation and be exposed to losses if the currency appreciates.

A Negative Net Exposure Position in FX Implies That the FI