Which of the Following Is True of Off-Balance-Sheet Activities

question 91

Multiple Choice

Which of the following is true of off-balance-sheet activities?

• A)They involve generation of fees without exposure to any risk.
• B)They include contingent activities recorded in the current balance sheet.
• C)They invite regulatory costs and additional "taxes."
• D)They have both risk-reducing as well as risk-increasing attributes.
• E)The risk involved is best represented by notional or face value.

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Definitions:

Vertical Integration

A strategy where a company expands its business operations into different steps on the same production path, such as when a manufacturer owns its supplier and/or distributor.

Supply Chain

The network of all entities involved in producing and delivering a product or service, from the raw material to the end user.

Successful Supply Chains

Supply chains that effectively and efficiently integrate the flow of goods, services, information, and finances from raw materials to end consumer.