In the weekend newspapers you read that one of your FX counterparties has gone into...

Vendor: ACI
Product: 3I0-013
Update on: Aug 18, 2025
Questions: 386

ACI 3I0-013 Question Answer

In the weekend newspapers you read that one of your FX counterparties has gone into liquidation. You have no netting or close-out agreements in place with this counterparty and remember that you have one forward deal outstanding. What is the main risk affecting your bank?

The loss of the entire principal amount of the deal

The “replacement risk”, also known as “replacement-cost risk”

The loss of the negative mark-to-market value of the deal

As the deal is in the future, there is no impact on P&L