P.J. Chase Stanley Bank holds $76 million in foreign exchange assets and $66 mil

Question

P.J. Chase Stanley Bank holds $76 million in foreign exchange assets and $66 million in foreign exchange liabilities. P.J. Chase Stanley also conducted foreign currency trading activity in which it bought $166 million in foreign exchange contracts and sold $135 million in foreign exchange contracts.

PJ. Chase Stanley Bank holds $76 million in foreign exchange assets and $66 million in foreign exchange liabilities. P.J. Chase Stanley also conducted foreign currency trading activity in which it bought $166 million in foreign exchange contracts and sold $135 million in foreign exchange contracts. a. What is PJ. Chase Stanley's net foreign assets? (Enter your answer in millions.) Net foreign assets million b. What is PJ. Chase Stanley's net foreign exchange bought? (Enter your answer in millions.) Net foreign exchange bought million c. What is PJ. Chase Stanley's net foreign exposure? (Enter your answer in millions.) Net foreign exposure million

Explanation / Answer

A) Net Foreign Assets = Total foreign assets – total foreign liabilities

      = 76m million -66 million

      = 10 million

b) Net foreign exchange bought = Foreign exchange contract bought - Foreign exchange contract sold

          = 166 million – 135million

          = 31 million

c) Net exposure = Foreign exchange contract bought + Net foreign exchange bought

=10 million +31 million

= 41 million

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