When analysing an FI's performance, it is not important to consider its off-balance-sheet activities as they have no current or future impact on the FI's financial standing.

Question

Quizplus · Accepted Answer

Off-balance-sheet activities can have a significant impact on an FI's financial standing, as they involve contingent liabilities and potential future cash flows that could impact the FI's profitability and liquidity. Therefore, it is important to consider these activities when analysing an FI's performance.

When Analysing an FI's Performance, It Is Not Important to Consider