A.5
2.6
CONFIDENTIAL
A large
proportion of the Fund's foreign
currency
assets are held in US dollars because
there is
no exchange risk involved, given that
the Hong Kong Dollar is linked to the US
Dollar Apart from the US dollar, the Fund also holds assets denominated in other major foreign currencies. They are the Canadian dollar,
deutschemark,
Japanese yen,
pound sterling,
French Franc and
Swiss Franc, Dutch guilder,
the ECU.
What kind of assets does the Fund hold?
A.6
and
of
Part of the Fund is placed on interest bearing deposits with (first class) banks in Hong Kong overseas, and part is invested in a variety financial instruments, including bonds, notes and treasury bills. Only instruments
which have good marketability and which are issued by or guaranteed by governments with high credit standing are acquired.
Q.7
Who will monitor the investment of the Exchange
· Fund and ensure that returns are reasonable?
CONFIDENTIAL
P21