Which of the following statements best describes the process of adjusting for credit risk of off-balance-sheet (OBS) non-market contracts under the Basel III credit risk weighting standards?

Question

Answer

The credit or default risk of OBS non-market contracts is approximately zero.

Answer

The credit conversion factors for OBS non-market contracts are between 0% and 150%.

Answer

The credit equivalent amount of OBS non-market contracts consists of a potential future exposure element and a current exposure element.

Answer

All of the above are correct.

Answer

The process requires converting OBS non-market contracts into credit equivalent amounts and multiplying the credit equivalent amounts by the appropriate risk weights.

Crowdly

Which of the following statements best describes the process of adjusting for cr...

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