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

question 42

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 and includes all OBS transactions
• C)requires the calculation of a conversion factor to create credit equivalent amounts for all OBS transactions
• D)requires multiplication of the credit equivalent amounts by the appropriate risk weights and the calculation of a conversion factor to create credit equivalent amounts

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Definitions:

Unemployment Rate

The portion of the labor group that is unoccupied with work but is actively seeking employment.

Personal Tax Rate

The percentage of an individual's income that is paid to the government as tax.

Medium of Exchange

A medium of exchange is an intermediary instrument or system used to facilitate the sale, purchase, or trade of goods between parties.

Non-Interest-Bearing Asset

An asset that does not generate interest income for its holder.