Examples of off-balance-sheet activities include

Question

Quizplus · Accepted Answer

Off-balance-sheet activities refer to any financial transactions or agreements entered into by a company that are not recorded on its balance sheet. Examples of such activities include loan sales, where a bank may sell its loans to another company, freeing up capital for new lending. Option B (extending loans to depositors) would be an on-balance-sheet activity, as it would involve recording the loan and the deposit simultaneously. Option C (borrowing from other banks) and option D (selling negotiable CDs) are also on-balance-sheet activities, as they involve borrowing and issuing debt that would be recorded on the balance sheet.

Examples of Off-Balance-Sheet Activities Include