Consider an FI with the following off-balance-sheet items: A two-year loan commitment with a face...
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Finance
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
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