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Required prepare a multicurrency exposure report for Stern bank.

2. Following is the consolidated balance sheet (000s omitted) of Stern bank, a U.S. financial institution with wholly owned corporate affiliates in London and Geneva. Cash and due from banks includes CHF 100,000 and a £(40,000) bank overdraft. Loans consist entirely of Swiss franc receivable while consolidated deposits include CHF 40,000 and £15,000. Stern Bank adopts the local currency as the functional currency for its foreign affiliates and so translates all assets and liabilities (including owners' equity) using the current rate. The exchange rate prevailing as of the balance sheet date was (£/$/CHF=1/2/4).

Required prepare a multicurrency exposure report for Stern bank.

Stern bank Consolidated Balance sheet as of year end (000)

Cash and due from banks $20,000 deposits $50,000
Loans 100,000
Fixed assets 30,000 owners equity 100,000
Total 150,000 150,000

Solution Summary

Guidance to help you reason your way through the computations.

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