The position which came in to existence because of holding assets less than liabilities is considered as ____________?
Correct answer: D. net short in currency
- A. net surplus in assets
- B. net surplus in liabilities
- C. net long in currency
- D. net short in currency
Explanation
When liabilities in a currency exceed assets, the institution has a net short position in that currency. A short position is exposed to losses if the currency appreciates.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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