The Calculation of the Risk-Adjusted Asset Values of OBS Market

question 39

Multiple Choice

The calculation of the risk-adjusted asset values of OBS market contracts

• A)nearly always equals zero because the exchange over which the contract initially traded assumes all of the risk.
• B)requires multiplication of the credit equivalent amounts by the appropriate risk weights.
• C)requires the calculation of a conversion factor to create credit equivalent amounts.
• D)All of the above.
• E)Answers B and C only.

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Definitions:

Deemed to Accept

An assumed or implicit acceptance of terms or conditions by conduct or by failing to object.

Reasonable Opportunity

A fair and adequate chance given to a party to perform an action or fulfill a condition within legal or contractual obligations.

Destination Contract

A contract specifying that the sale of goods will be completed upon their arrival at a specified location.

F.O.B. City

Refers to "Free on Board" at a certain city, indicating that the seller is responsible for the goods until they are loaded onto a transport vehicle at a specified location.