Consider an FI with the following off-balance-sheet items: A two-year loan commitment with a face value of $120 million, a standby letter of credit with a face value of $20 million and trade-related letters of credit with a face value of $70 million.What is the total credit equivalent amount?

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The total credit equivalent amount is calculated by converting the off-balance-sheet items into their credit equivalent amounts using conversion factors. For a two-year loan commitment, the conversion factor is typically 50%, for a standby letter of credit, it's usually 100%, and for trade-related letters of credit, it's often 20%. Therefore, the calculation is as follows: ($120 million * 50%) + ($20 million * 100%) + ($70 million * 20%) = $60 million + $20 million + $14 million = $94 million.

Consider an FI with the Following Off-Balance-Sheet Items: a Two-Year