Banking · Risk Management & Counterparty Risk
A bank with significant derivatives exposure often monitors counterparty credit risk separately from ordinary loan default risk. Counterparty credit risk differs because the exposure:
- 1may change over time with the mark-to-market value of the contract✓
- 2applies only to unsecured agricultural advances
- 3exists only in government securities portfolios
- 4remains fixed at sanction regardless of market movements
Correct answer
may change over time with the mark-to-market value of the contract
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