When Using the BIS Standardized Model (Partial Risk Factor Approach)

question 97

True/False

When using the BIS standardized model (partial risk factor approach) to determine capital requirements of the trading book, correlations for equity risk are set by the Federal Reserve.

Calculate the net asset value (NAV) of mutual funds and understand its significance.

Understand the structure and function of exchange-traded funds (ETFs) and how they compare to mutual funds.

Identify the fees associated with mutual fund investments, including management fees, load fees, and 12b-1 fees.

Calculate the impact of fees on mutual fund investments and understand the concept of load and no-load funds.

---

Definitions:

Market Price

The current price at which an asset or service can be bought or sold, determined by demand and supply forces in the market.

Net Income

Net income is the profit a company has after all expenses, taxes, and costs have been deducted from total revenue, indicating the company's financial health.

Dividends

Payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders.

Price-Earnings Ratio

A financial measurement for equities determined by dividing the share's market price by its earnings per share.