An Off-Balance-Sheet Asset Is an Item That

question 75

Multiple Choice

An off-balance-sheet asset is an item that:

• A)moves on to the asset side of the balance sheet when a contingent event occurs
• B)is off the balance sheet as it is not part of the FI's core operations
• C)is off the balance sheet as the FI does not wish to reveal its existence
• D)is off the balance sheet as it neither has an impact on the risk or profitability of the FI

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Definitions:

Industry Type

A classification that categorizes companies and business activities into specific sectors based on similar production processes, products, or services.

Price-Earnings Ratio

A financial ratio that measures a company's current share price relative to its per-share earnings.

Return on Total Assets

A financial ratio that measures a company's profitability relative to its total assets, indicating how efficiently assets are used to generate profit.

Tax Expense

The total amount of taxes a company must pay on its income, including federal, state, and local taxes.