The following are the foreign currency positions of an FI, expressed in the foreign currency. The exchange
Question:
The exchange rate of dollars per Sf is 0.9301, of dollars per British pound is 1.6400, and of dollars per yen is 0.010600.
The following are the foreign currency positions converted to dollars.
a. What is the FIs net exposure in Swiss francs stated in Swiss francs (Sf) and in dollars ($)?
b. What is the FIs net exposure in British pounds stated in British pounds (£) and in dollars ($)?
c. What is the FIs net exposure in Japanese yen stated in Japanese yen (¥) and in dollars ($)?
d. What is the expected loss or gain if the Sf exchange rate appreciates by 1 percent? State your answer in Swiss francs (Sf) and in dollars ($).
e. What is the expected loss or gain if the £ exchange rate appreciates by 1 percent? State your answer in British pounds (£) and in dollars ($).
f. What is the expected loss or gain if the ¥ exchange rate appreciates by 2 percent? State your answer in Japanese yen (¥) and in dollars($).
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...
Step by Step Answer:
Financial Markets and Institutions
ISBN: 978-0077861667
6th edition
Authors: Anthony Saunders, Marcia Cornett