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Question
Which of the following is NOT a criticism of the Basel I risk-based capital ratio?
A. All commercial loans are given equal weight regardless of the credit risk of the borrower.
B. The ratio incorporates off-balance-sheet risk exposures.
C. Grouping assets into different risk categories may encourage balance sheet asset allocation games.
D. The treatment does not include interest rate or foreign exchange risk.
E. The weights in the four risk categories imply a cardinal measurement of relevant risk between each category.
Answer
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Related questions
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C. earthquake and flood.
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E. product liability and farm owner multiple peril.
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The McCarran-Ferguson Act of 1945
A. separated commercial banking from insurance activities.
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C. stipulated that insurance companies are to be regulated at the state level.
D. initiated a national insurance guaranty fund.
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B. Pure arbitrage.
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A. has publicly-traded common stock.
B. provides equity funds to companies that already have publicly traded common stock.
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