7-88 In which of the following situations would an FI be considered net long in foreign assets if it has ¥100 million in loans?

Question

Quizplus · Accepted Answer

An FI would be considered net long in foreign assets when its foreign assets exceed its foreign liabilities. Therefore, the amount of liabilities should be less than the amount of loans or assets.

In option A, liabilities exceed loans which means that the FI would be net short in foreign assets.

Option B is the correct answer as the amount of liabilities is less than the amount of loans. This implies that the FI would be net long in foreign assets.

Option C has an equal amount of liabilities and loans which means that the FI's position is neutral.

Option D has liabilities that exceed loans, which implies that the FI would be net short in foreign assets.

Option E is incorrect because Option A is not a valid answer.

7-88 in Which of the Following Situations Would an FI