Question 1

Which of the following are typical off-balance sheet activities undertaken by Australian banks?

Accepted Answer

A)  futures contracts and forward contracts 
B)  direct credit substitutes. 
C)  commitments. 
D)  All of the listed options are correct. 
A)  futures contracts and forward contracts 
B)  direct credit substitutes. 
C)  commitments. 
D)  All of the listed options are correct.

Question 2

Where are the contingent items disclosed in the financial statements?

Accepted Answer

A)  On the assets side of the balance sheet. 
B)  On the liabilities side of the balance sheet. 
C)  As footnotes to financial statements. 
D)  In the income statement. 
A)  On the assets side of the balance sheet. 
B)  On the liabilities side of the balance sheet. 
C)  As footnotes to financial statements. 
D)  In the income statement.

Question 3

Which of the following statements is true?

Accepted Answer

A)  Draw-down risk is a type of liquidity risk. 
B)  Draw-down risk is a type of investment risk. 
C)  Draw-down risk is a type of credit risk. 
D)  Draw-down risk is a type of economic risk. 
A)  Draw-down risk is a type of liquidity risk. 
B)  Draw-down risk is a type of investment risk. 
C)  Draw-down risk is a type of credit risk. 
D)  Draw-down risk is a type of economic risk.

Question 4

Briefly explain how off-balance-sheet transactions can affect an FI's solvency.

Accepted Answer

An item or activity is an OBS asset if,

Question 5

Assume that a bank's market value of assets is $200, the market value of its contingent assets is $50, the market value of its liabilities is $180 and the market value of its contingent liabilities is $60. What is the value of this bank's net worth?

Accepted Answer

A)  $200 + $180 - $50 - $60 = $270 
B)  $180 - $200 + $50 + $60 = $90 
C)  $200 - $180 + $50 - $60 = $10 
D)  $200 - $180 - $50 + $60 = $30. 
A)  $200 + $180 - $50 - $60 = $270 
B)  $180 - $200 + $50 + $60 = $90 
C)  $200 - $180 + $50 - $60 = $10 
D)  $200 - $180 - $50 + $60 = $30.

Which of the following are typical off-balance sheet activities undertaken by Australian banks?

Where are the contingent items disclosed in the financial statements?

Which of the following statements is true?

Briefly explain how off-balance-sheet transactions can affect an FI's solvency.

Assume that a bank's market value of assets is $200, the market value of its contingent assets is $50, the market value of its liabilities is $180 and the market value of its contingent liabilities is $60. What is the value of this bank's net worth?

Why Are Financial Institutions Special

The Financial Services Industry: Depository Institutions

The Financial Services Industry: Other Financial Institutions

Risk of Financial Institutions

Interest Rate Risk Measurement: The Repricing Model

Interest Rate Risk Measurement: the Duration Model

Managing Interest Rate Risk Using Off Balance Sheet Instruments

Credit Risk I: Individual Loan Risk

Market Risk

Credit Risk I: Individual Loan Risk

Credit Risk II: Loan Portfolio and Concentration Risk

Sovereign Risk

Foreign Exchange Risk

Liquidity Risk

Liability and Liquidity Management

Technology and Other Operational Risk

Capital Management and Adequacy

Filters

Exam 16: Off-Balance-Sheet Activities

Which of the following are typical off-balance sheet activities undertaken by Australian banks?

Where are the contingent items disclosed in the financial statements?

Which of the following statements is true?

Briefly explain how off-balance-sheet transactions can affect an FI's solvency.

Assume that a bank's market value of assets is $200, the market value of its contingent assets is $50, the market value of its liabilities is $180 and the market value of its contingent liabilities is $60. What is the value of this bank's net worth?

Why Are Financial Institutions Special

The Financial Services Industry: Depository Institutions

The Financial Services Industry: Other Financial Institutions

Risk of Financial Institutions

Interest Rate Risk Measurement: The Repricing Model

Interest Rate Risk Measurement: the Duration Model

Managing Interest Rate Risk Using Off Balance Sheet Instruments

Credit Risk I: Individual Loan Risk

Market Risk

Credit Risk I: Individual Loan Risk

Credit Risk II: Loan Portfolio and Concentration Risk

Sovereign Risk

Foreign Exchange Risk

Liquidity Risk

Liability and Liquidity Management

Technology and Other Operational Risk

Capital Management and Adequacy

Filters