Multiple Choice
Consider an FI with the following off-balance-sheet items: A two-year loan commitment with a face value of $120 million, a standby letter of credit with a face value of $20 million and trade-related letters of credit with a face value of $70 million.All counterparties have a credit rating of BBB.What is the capital amount the FI needs to hold against these exposures?
A) $5.04 million
B) $7.52 million
C) $8.4 million
D) $24.8 million
Correct Answer:
Verified
Correct Answer:
Verified
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