• University of Saskatchewan

• COMM 469

COMM 469 – Management of Financial Institutions Quiz 3

March 23, 2018

Name: ______________________________________

ID: _________________________________________

Part A: Answer all questions 10x1=10

35. Which of the following is NOT a source of foreign exchange risk?

A. Trading foreign currencies.

B. Making domestic-currency loans to foreign corporations.

C. Buying foreign-issued securities.

D. Issuing foreign currency-denominated debt.

E. Making foreign currency loans.

36. The market in which foreign currency is traded for immediate delivery is the

A. spot market.

B. forward market.

C. futures market.

D. currency swap market.

E. London capital market.

39. A negative net exposure position in FX implies that the FI is

A. net long in a currency and exposed to depreciation of the foreign currency.

B. net short in a currency and exposed to depreciation of the foreign currency.

C. net long in a currency and exposed to appreciation of the foreign currency.

D. net short in a currency and exposed to appreciation of the foreign currency.

E. neither long nor short in a currency.

52. Most profits or losses on foreign trading for FIs come from

A. open positions or speculation.

B. market making.

C. acting as agents for retail customers.

D. acting as agents for wholesale customers.

E. hedging activities.