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

question 177

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.

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Definitions:

Satisficing Decisions

Solutions that aim for acceptable results rather than for the best or optimal ones.

Tactical Decisions

Short-term choices made to achieve specific objectives that are part of a larger strategic plan.

Heuristics

Shortcuts or “rules of thumb” that allow us to make judgments and decisions quickly and efficiently.

Rules Of Thumb

Simple, practical guidelines or principles derived from experience and used to make decisions or solve problems quickly.