A bank has a bilateral transaction with a client and an offsetting transaction with a dealer that is cleared through a central clearing counterparty.

The bank expects the transaction with the client to have a positive value in the future and the transaction with the dealer to have a negative value.

Assume that the interest received on the bank's margin collateral is 2% and the cost of funding to purchase more collateral is 4%.

Which of the following statements are true about the funding valuation adjustment (FVA)?

Check all that apply:

a. FVA is positive.

b. The funding cost is 4%.

c. The funding cost is 2%.

d. The funding cost is 2%.