Hi.

TRUE OR FALSE. Please also explain.

43.

An international bank's net position in a foreign currency is measured by the difference between the volume of that currency purchased and the volume of that currency sold.

44.

If an international bank has gone net long in a particular currency, it will score a positive gain if the value of that currency declines.

45.

If an international bank has adopted a net short position in a particular currency, and that currency's exchange value increases, the bank will achieve a profit from trading the currency.

46.

A bank's net foreign-currency-denominated assets in a given currency are equal to the volume of its assets denominated in that currency less any liabilities that the bank has issued denominated in the same currency.

47.

Short hedges in currency futures contracts are used to protect a bank or bank customer against rising currency prices.

48.

A put option on currency futures is often used to protect against a rise in currency prices.

49.

A call option is often employed to protect a bank or bank customer against losses from falling currency prices.

50.

A foreign currency swap fully removes the borrower's currency risk exposure.

51.

In a foreign currency swap, a customer who needs to borrow in foreign currency, receives the domestic currency today and swaps it back for the foreign currency just in time to repay the loan in the foreign currency.

52.

A sight draft is a payment for purchase of goods and services across national borders which is payable only on a specific future date.

53.

A time draft is a payment for purchase of goods and services across national borders which is payable upon presentation to the bank.

-fm