In which of the following FX trading activities does the FI not assume FX risk?
A)The purchase and sale of foreign currencies for the purpose of profiting from forecasting or anticipating future movements in FX rates.
B)The purchase and sale of foreign currencies to allow customers to partake in and complete international commercial trade transactions.
C)The purchase and sale of foreign currencies for the purpose of offsetting customer exposure in any given currency.
D)The purchase and sale of foreign currencies to allow customers to take positions in foreign real and financial investments.
E)Answers B and D only.

Question

Quizplus · Accepted Answer

In activities B and D, the FI is not assuming FX risk because it is acting as an intermediary between customers and the FX market. The FI is not taking on any positions in foreign currencies, so it is not exposed to FX risk.

In Which of the Following FX Trading Activities Does the FI