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22-44 the Use of Futures Contracts by Banks Is Subject

question 64

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22-44 The use of futures contracts by banks is subject to risk-based capital guidelines through the off-balance-sheet risk calculations for risk-based capital.


Definitions:

Par

The face value of a bond or other financial instrument, typically the amount at which it will be paid out upon maturity.

Yield

The earnings generated from an investment, including interest or dividends, that result from owning a specific financial instrument.

Premium Bond

A bond sold for more than its face value, typically occurring when its interest rate is higher than the current market rate.

Market Price

The ongoing rate at which a marketplace values the buying or selling of assets or services.

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