Question

a. What is the Fl's net exposure in Swiss francs stated in Swiss francs (Sf) and in dollars ($)? b. What is the Fl's net exposure in British pounds stated in British pounds (£) and in dollars ($)? c. What is the Fl's net exposure in Japanese yen stated in Japanese yen (¥) and in dollars ($)? (Negative amounts should be indicated by a minus sign.) d. What is the expected loss or gain if the Sf exchange rate appreciates by 1 percent? e. What is the expected loss or gain if the £ exchange rate appreciates by 1 percent? (Round your answer to the nearest whole dollar amount. (e.g., 32)) f. What is the expected loss or gain if the exchange rate appreciates by 2 percent? (Negative amount should be indicated by a minus sign. Round your answer to the nearest whole dollar amount. (e.g., 32)) a. Fl's net exposure in Swiss francs Fl's net exposure in Dollars b. FI's net exposure in British pounds Fl's net exposure in Dollars C. Fl's net exposure in Japanese yen Fl's net exposure in Dollars d. Expected loss or gain in Swiss francs e. Expected loss or gain in British pounds f. Expected loss or gain in Japanese yen

Answer 1

Solution :-

(a) Net Exposure Liabilities t Fx Bought -FX Sold Assets Now FlsNet Exposuxe in Suwiss rancs St) 147900-63220 t20400 RSS00 Fl's Net Exposcre m as dollars l) 145000-61000 +200co 2S000 79000 (b) FI'S Net Exposure in British Pands lE) -S7500-36S00 +30500 -34000 2 f17500 FI'S Net Exposure in Dollaxs E75335-47815 +3995s- 44540

$22935 2. Fl's Net Exposure in Japancse Ven 10400000 2 9200000 So00000 +3100000 -260000o FI's Net Exposure in dlollars 99112 92441-47650 +39543 1 2-$ 34728 (d) 1P assets are 9reater than clicbiltes an appreciation of the toreign will generate a gain then exchange cates So Net Exposure in Expected gain =Swiss Faan Cs Statedl in dollas xappreci -ation ate X 1/ $79 000 1 790

le) Expected Gain Net Exposue In Bnitishx appreciation Pound Stated jm dollars ate २२१२5 X 1% २२१ Expected loss ENet Exposure in Jaipanese yen Stated in Clollars appareciation rate -34.778 - 496 N2 SA (l