The reasons nondepository FIs have less FX risk than major money center banks include
A)Smaller asset sizes.
B)Prudent person concerns.
C)Regulations.
D)All of the options.

Question

Quizplus · Accepted Answer

Nondepository FIs have less FX risk than major money center banks due to a combination of factors, including smaller asset sizes, prudent person concerns, and regulations. By diversifying their portfolios and investing in a range of assets, nondepository FIs can mitigate their exposure to unexpected currency fluctuations. Additionally, regulations such as capital adequacy requirements and risk management guidelines can help to limit the FX risk faced by these institutions. Overall, the combination of these factors helps to reduce the FX risk faced by nondepository FIs in comparison to major money center banks.

The Reasons Nondepository FIs Have Less FX Risk Than Major