In Determining the Risk-Adjusted Value of the On-Balance-Sheet Credit Equivalent

question 17

True/False

In determining the risk-adjusted value of the on-balance-sheet credit equivalent amounts of the contingent guarantee contracts, the risk weights are determined by the credit rating of the underlying counterparty of the off-balance-sheet activity.

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Definitions:

Framing

The way information is presented or structured, affecting perception and decision-making.

Illogical Preferences

Choices or decisions made that contradict rational decision-making models or that do not follow logical consistency.

Reference Points

Specific targets or standards against which subsequent achievements, experiences, or the current status can be compared.

Goal Setting

The process of identifying specific, measurable, and time-targeted objectives.