14-42 The FI is acting as a hedger when it
A)buys or sells currency to balance the FI's net exposure.
B)takes a nonzero net position in a particular currency.
C)processes an exporter's transaction in a foreign currency.
D)makes a market in a currency.
E)advises customers on their international business.

Question

Quizplus · Accepted Answer

A FI acts as a hedger when it buys or sells currency to balance its net exposure. This means that the FI is taking steps to minimize its risk in the foreign exchange market by offsetting any potential losses with gains.

14-42 the FI Is Acting as a Hedger When It