Which of the following is an "off-balance-sheet commitment" that can lead to the creation of a money market security?

Multiple choice answers

a) Interest rate swap

b) letter of credit

c) All of these statements are correct.

d) Loan commitment.

Expert Solution

Letter of credit has future obligations and they are not recorded in the balance sheet whereas interest rate swaps are also off balance sheet items along with unused portion of loan commitment are also off balance sheet commitment.

All the other options are true

Correct answer is option (D) loan commitment.

jeff jeffy answered 2 years ago

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