Which of the Following Are Correct About Off-Balance Sheet Activities

question 37

Multiple Choice

Which of the following are correct about off-balance sheet activities?

• A)They provide a key source of interest income for many FIs.
• B)By hedging against on-balance-sheet interest rate, FX and credit risks, OBS derivative instruments actually reduce FI overall insolvency risk.
• C)Higher regulatory costs on derivative instruments may cause FIs to over-hedge resulting in a decrease in FI insolvency risk.
• D)All of the listed options are correct.

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Definitions:

Priority Setting

The process of determining the order in which tasks or decisions should be handled based on their importance, urgency, or impact.

Residential Treatment

A comprehensive, live-in therapeutic program designed to address mental health, substance abuse, or behavioral issues.

Illicit Substances

Substances that are illegal to possess, manufacture, or distribute due to their potential for abuse and addiction.

Outcome Criteria

Specific, measurable goals set at the beginning of treatment to evaluate the effectiveness and success of the interventions over time.