Answer-first summary for fast verification
Answer: CHF -1 billion net exposure
Compute the bank’s net CHF exposure by combining balance-sheet exposure and trading exposure: - **Assets:** CHF 10.0 billion - **Liabilities:** CHF 12.0 billion - Net balance-sheet exposure = **10 - 12 = -2 billion CHF** - Trading activities: - Bought CHF 3.0 billion = **+3 billion CHF** - Sold CHF 2.0 billion = **-2 billion CHF** - Net trading exposure = **+1 billion CHF** Total net exposure = **-2 + 1 = -1 billion CHF**. So the correct answer is **B**.
Author: Manit Arora
Ultimate access to all questions.
Question-191.3. A U.S. bank holds portfolios denominated in Swiss francs as follows: CHF 10.0 billion in assets and CHF 12.0 billion in liabilities. With regard to the bank’s trading activities, they have bought and sold the following (i.e., spot, futures, and forward contracts): bought CHF 3.0 billion and sold CHF 2.0 billion. What is the bank’s net exposure to Swiss francs (CHF)?
A
CHF -3 billion net exposure
B
CHF -1 billion net exposure
C
zero net exposure
D
CHF +1 billion net exposure
No comments yet.