Financial Risk Manager Part 2
Get started today
Ultimate access to all questions.
Comments
Loading comments...
Ultimate access to all questions.
A financial institution has a two-way credit support annex (CSA) with a counterparty covering a portfolio valued at JPY 400 million. The margining terms of the collateralized portfolio include a threshold of JPY 180 million, a minimum transfer amount of JPY 30 million, and a margin period of risk of 10 days. Which of the following is correct?
A
A lower threshold value implies that a larger portion of exposure is protected by collateral.
B
A shorter margin period of risk implies that a smaller portion of exposure is protected by collateral.
C
A lower independent amount implies that a larger portion of exposure is protected by collateral.
D
The protection from collateral specified in the CSA is uniform throughout the life of the exposure profile.