The entity has comprehensive, written credit risk management policies and procedures for derivative activities. This addresses to:

Question

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Counterparty risk is the risk that the other party to a derivative contract will not fulfill its obligations. Comprehensive, written credit risk management policies and procedures for derivative activities would address this risk by establishing criteria for evaluating the creditworthiness of counterparties and by outlining the steps to be taken in the event of a counterparty default.

The Entity Has Comprehensive, Written Credit Risk Management Policies and Procedures