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Answer A,B, and C for the following Off-Balance Sheet Risks: 1. loans sold 2. loan commitments 3. settlement risk 4. when issued Treasury securities 5.
Answer A,B, and C for the following Off-Balance Sheet Risks:
1. loans sold
2. loan commitments
3. settlement risk
4. when issued Treasury securities
5. letters of credit
6. swaps
a. what action by a financial institution exposes it to the indicated risk?
b. what type of risk the affects the financial institution as a result of that activity?
c. what circumstances must occur for the financial institution to incur a loss (or an unexpectedly large loss) from that risk.
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