Which of the Following Statements About Leverage Ratios Under Basel

question 169

Multiple Choice

Which of the following statements about leverage ratios under Basel III is correct?

• A) The leverage ratio is the ratio of the bank's Tier 1 Capital to total assets of the bank, excluding its off- balance sheet exposures and derivatives.
• B) The purpose of introducing a leverage ratio is to avoid the build-up of excess leverage that could potentially lead to a "credit crunch" in stressed conditions.
• C) The leverage ratio under Basel III must be higher than 4%.
• D) The leverage ratio is the ratio of the bank's Tier 1 and Tier 2 Capital to total assets of the bank, including its off-balance sheet exposures and derivatives.

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Definitions:

Group 1

The first group or category in a study or classification scheme.

Variance

Variance measures the dispersion of a set of data points around their mean, quantifying how much the numbers in the set differ from each other.

Independent Groups

A study design where different participants are used in each group of the experiment, with each participant being exposed to only one level of the experimental manipulation.

Related

A term indicating that two or more variables have some form of association or connection with each other.