50.A U.S. bank has made £50 million in Britain and has £40 in deposits. The bank's currency trading desk has also contracted to buy £20 million and has short positions of £15 million. What is the bank's net exposure? How could they use forward contracts to hedge the exposure? If the bank has exposures in Euros and yen would you recommend they use the forward hedge? Why or why not?
Page: 231-232 Level: Difficult 51.Explain how a drop in the value of the dollar could affect the U.S. import and export sectors.
Page: 223-224 Level: Medium 114