Off-balance sheet risk is borne by: Derivatives used by commercial banks to hedge positions. Loan commitments....
Off-balance sheet risk is borne by:
Derivatives used by commercial banks to hedge positions.
Loan commitments.
Stand-by letters of credit.
All of the above.
None of the above.
Homework Answers
Option A is correct.
Derivatives used by commercial banks to hedge positions.
OBS activities are often designed to reduce risks through hedging with derivative securities and other means. So the risks are to be mitigated and borne by Derivates used to hedge position.
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Off-balance sheet risk is borne by:
Derivatives used by commercial banks to hedge positions.
Loan commitments....
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