Question: Question 11 15 pts (a) How does one distinguish between an off-balance-sheet asset and an off-balance-sheet liability? Provide examples in explaining your answer. (3 marks)

Question 11 15 pts (a) How does one distinguish

Question 11 15 pts (a) How does one distinguish between an off-balance-sheet asset and an off-balance-sheet liability? Provide examples in explaining your answer. (3 marks) (b) How is a financial institution exposed to draw down, interest rate and credit risks when it makes loan commitments? (6 marks) (c) Defend the statement that although off-balance-sheet activities expose financial institutions to several forms of risks, they also can alleviate the risks of financial institutions. Provide examples of how the off-balance sheet activities can be used to minimise the risks. (6 marks)

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