Banks commonly engage in activities which generate income without requiring the bank to invest funds. These activities are known as off-balance sheet activities because they are classified as asset or debt financing activities that are not on the companys balance sheet.

Using the following table, select which off-balance sheet activity each scenario best represents.

Scenario	Off-Balance Sheet Activity
Miracle Solutions Company and Silo Company each want to exchange interest rate payments; however, both companies want to ensure the others payments are guaranteed. As a result, they both pay Clover Financial Bank 3% to guarantee payments are made.	Interest Rate Swaps
The City of Atlanta wants to issue bonds to raise $55 million for infrastructure projects it plans to complete over the next year; however, it needs to make sure that the bonds are easily placed. As a result, they decide to pay City Financial Bank $1 million to back the bonds in an attempt to make the bonds easier to place.	Credit Default Swaps
Lincoln Bank signs an agreement with Pixel Company to loan them $1 million, at a time specified by Pixel Company within the next six months, to finance their new facility, with an interest rate of 6.5 percent. Pixel Company pays Lincoln Bank $10,000 in exchange for locking in the interest rate today.	Loan Commitments
Abraham Bank signs an agreement to purchase 3 million yen in one year from Engary Company for $0.0091 per yen and to sell 3 million yen in one year to Isolot Company for $0.01 per yen, with the profit being $0.0009 per yen.	Forward Currency Contracts