Question: Answer A,B, and C for the following Off-Balance Sheet Risks: 1. loans sold 2. loan commitments 3. settlement risk 4. when issued Treasury securities 5.

Answer A,B, and C for the following Off-Balance Sheet Risks:

1. loans sold

2. loan commitments

3. settlement risk

4. when issued Treasury securities

5. letters of credit

6. swaps

a. what action by a financial institution exposes it to the indicated risk?

b. what type of risk the affects the financial institution as a result of that activity?

c. what circumstances must occur for the financial institution to incur a loss (or an unexpectedly large loss) from that risk.

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