QUESTION 4 Which of the following describes the off balance sheet business of commitments? A form of guarantee provided by a bank to a third party, promising financial compensation for non-performance of commercial contract by a bank client An undertaking by a bank to support the financial obligations of a client The contractual financial obligations of a bank that are yet to be completed or delivered None of the given answers

QUESTION 3

The requirement and observation of standards designed to ensure the stability and soundness of a financial system is called:

fiscal policy.

monetary policy.

prudential supervision.

the Basel accord

he flow of funds between lenders and borrowers is channeled:

indirectly through financial intermediaries.

indirectly through financial markets.

directly through financial intermediaries.

none of the given answers.

QUESTION 1

Which of the following statements describes the risk associated with a financial asset?

Total financial compensation received from an investment expressed as a percentage of the amount invested

Probability that the actual return on an investment will vary from the expected return

Ability to sell an asset within a reasonable time at current market prices and for reasonable transaction costs

When the expected cash flows from a financial asset are to be received by the investor or lender