1. Off-balance-sheet activities generally have risk-reducing attributes, but seldom have risk-increasing attributes.
True
False
2. The ability to form financial holding companies for the purpose of creating full-service financial institutions has caused an increase in affiliate risk.
True
False
3. An FI has assets of $800 million and liabilities of $740 million.
If the FI bought call options on bonds with a face value of $50 million, what is the minimum amount of the stockholder's potential true net worth?
$10 million.
$70 million.
$110 million.
$790 million.
$850 million.