Which of the following statements is TRUE?A.A FI is "short-funded" if the maturity of its labilities are shorter than the maturities of its assets. B.Refinancing risk is the risk that the cost of re-borrowing funds will be lower than the return being earned on asset investments. C.If the Swiss franc is expected to appreciate in the near future, a U.S.-based FI in Bern City would prefer to net short in its foreign asset positions.D.FIs face a high level of interest rate risk when performing their brokerage function.E.If a FI is "long-funded", it would incur a loss if interest rates are going to increase significantly in the near future.

Which of the following statements is FALSE?A.An FI is “net long” in foreign assets if it holds more foreign assets than liabilities.B.Matching the size of the foreign currency book will not eliminate the risk of the international transactions if the maturities of the assets and liabilities are mismatched.C.Foreign exchange risk is the risk that exchange rate changes can affect the value of an FI’s assets and liabilities denominated in foreign currencies.D.If the euro is expected to depreciate in the near future, an Australian-based FI in Paris would prefer net long in its foreign (euro) asset positions.E.Given the current spot rate is S$1.50/A$1, if the exchange rate at the end of the year is S$1.00/A$1, the Australian dollar have depreciated against the Singapore dollar.

Which of the following statements is TRUE?A.An FI is net long in foreign assets if it holds more foreign liabilities than foreign assets. B.Off-balance-sheet activities often affect the shape of a FIs current balance sheet through the creation of contingent claims. C.For an FI to exactly hedge the foreign investment risk, the foreign currency assets must equal the foreign currency liabilities. D.Technology risk is the uncertainty that economies of scale or scope will be realized from the investment in new technologies. E.To be immunized against foreign currency and foreign interest rate risk, an FI should match either the size or the maturities of its foreign assets and foreign liabilities.

True or False QuestionTrue or false: The less time you have to let your investments work, the more advantageous it is to invest in stocks rather than short-term government bonds and certificates of deposit.True false question.TrueFalse

Which of the following is a disadvantage associated with Money Markets?Limited investment optionsLengthy maturity periodsHigh risk of principal lossUncertain interest rates

The risk that the returns on funds to be reinvested will fall below the cost of the funds is: A.repricing gap.B.credit risk.C.reinvestment risk.D.liquidity risk.E.refinancing risk.