The Potential Exposure Component of the Credit Equivalent Amount of OBS

Multiple Choice

The potential exposure component of the credit equivalent amount of OBS derivative items reflects

A) the probability of an adverse price movement in contracts.
B) the cost of replacing a contract if a counterparty defaults today.
C) the probability today of a counterparty contract default in the future.
D) the maximum price loss for any given position.
E) the probability of an adverse price movement in contracts and the maximum price loss for any given position.