The Potential Exposure Component of the Credit Equivalent Amount of OBS

question 49

Multiple Choice

The potential exposure component of the credit equivalent amount of OBS derivative items reflects

• A)the probability of an adverse price movement in contracts.
• B)the cost of replacing a contract if a counterparty defaults today.
• C)the probability today of a counterparty contract default in the future.
• D)the maximum price loss for any given position.
• E)the probability of an adverse price movement in contracts and the maximum price loss for any given position.

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Definitions:

Protein Synthesis

The cellular process of building proteins from amino acids based on the instructions coded in DNA and mediated by RNA.

Microfilament

Cytoskeletal element composed of actin subunits; reinforces cell membranes; functions in movement and muscle contraction.

Muscle Contraction

The process by which muscle fibers produce force and tension through the sliding of actin and myosin filaments, powered by ATP.

Nuclear Envelope

The double membrane structure that surrounds the nucleus in eukaryotic cells, controlling the flow of substances in and out of the nucleus.