If a Future Credit Crunch Is Possible, a Loan Commitment

question 64

Multiple Choice

If a future credit crunch is possible, a loan commitment may expose the FI to

• A)credit risk.
• B)interest rate risk.
• C)sovereign country risk.
• D)funding risk.
• E)exchange rate risk.

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Definitions:

Outstanding Cheques

Checks that have been written and issued but not yet cashed or cleared through the banking system.

On-line Retailing

Online Retailing is the selling of goods or services over the internet, where customers can shop from a variety of vendors at any time.

Internet Growth

The expansion and increase in usage, infrastructure, and capabilities of the internet across the world.

Collection Time

The average amount of time it takes for a business to receive payments owed by its customers after a sale has been made, indicative of a company's efficiency in collecting accounts receivable.