Which of the Following Statements Is Correct

question 468

Multiple Choice

Which of the following statements is correct?

• A) Unilateral collateral obligations to sovereign counterparties provide liquidity to banks.
• B) Under Basel III commercial banks are most likely to incur lower costs to service their sovereign clients.
• C) While banks usually do not call for collateral from sovereign counterparties, they must provide collateral for the offsetting hedge transactions which are undertaken with commercial counterparties.
• D) Uncollateralised exposures to sovereign counterparties will not require additional regulatory capital to be set aside against potential credit losses

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Definitions:

Emancipated Minors

Minors who have been legally granted some of the rights and responsibilities of adulthood, often through court process or marriage.

Avoid

To keep away from or prevent something from happening, often used in legal contexts regarding contracts or obligations.

Incompetents

Individuals who are legally declared unable to manage their own affairs due to mental incapacity, age, or other reasons, requiring a guardian or conservator.

Intoxicated Persons

Intoxicated persons are those under the influence of alcohol or drugs to a degree that impairs their ability and judgement, impacting their legal capacity in certain contexts.