Consider an FI with the Following Off-Balance-Sheet Items: a Two-Year

question 37

Multiple Choice

Consider an FI with the following off-balance-sheet items: A two-year loan commitment with a face value of $120 million, a standby letter of credit with a face value of $20 million and trade-related letters of credit with a face value of $70 million.All counterparties have a credit rating of BBB.What is the capital amount the FI needs to hold against these exposures?

• A)$5.04 million
• B)$7.52 million
• C)$8.4 million
• D)$24.8 million

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Definitions:

Treatment for Adolescents with Depression Study (TADS)

A landmark research project evaluating the effectiveness of different treatments for adolescents suffering from depression.

Antidepressant Medication

Antidepressant medication is used to treat major depressive disorder and other conditions by balancing chemicals in the brain to improve mood and emotions.

Cognitive-behavioral Therapy

Psychotherapy centered on boosting well-being and tackling challenges by adjusting negative emotions, actions, and thoughts.

Placebo Treatment

A treatment or procedure that is given to a control group during research studies which has no therapeutic effect but is identical in appearance to the actual treatment being tested.