What is the banks net exposure in dollars will the bank


Suppose that Commerce Bank in Poland holds $ 400 in assets and $ 1,000 in liabilities denominated in dollars. The home currency is the zloty, and the current spot exchange rate is $ 1 = 145 zlotys.

a. What is the bank's net exposure in dollars?

b. Will the bank gain or lose if the spot exchange rate changes to $ 1 = 150 zlotys? Calculate the gain or loss.

c. Will the bank gain or lose if the spot exchange rate changes to $ 1 = 140 zlotys? Calculate the gain or loss.

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Financial Management: What is the banks net exposure in dollars will the bank
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