Which Statement About Modern Matched-Maturity Transfer Pricing in Banks Is

question 512

Multiple Choice

Which statement about modern matched-maturity transfer pricing in banks is correct?

• A) It is now a widely accepted standard that banks should use a single representative transfer price across the entire maturity spectrum.
• B) Modern matched-maturity pricing systems include an additional liquidity surcharge that is specifically applied to more liquid short maturities.
• C) Matched-maturity transfer prices should represent a weighted average cost of capital that incorporates the cost of equity into the cost of borrowed funds.
• D) Modern matched-maturity systems differentiate transfer prices by the maturity of the commitment and also apply a marginal funding cost perspective.

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Definitions:

Internal Control

Systems and processes designed to ensure the reliability of financial reporting, compliance with laws and regulations, and effective and efficient operations.

Operating Segments

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