Which of the Following Statements About the Liquidity Coverage Ratio

question 601

Multiple Choice

Which of the following statements about the Liquidity Coverage Ratio is correct?

• A) The LCR is a measure to ensure that the reserve of high quality liquid assets is sufficient to cover short term demand for liquidity in a stress situation.
• B) the ratio (cash outflow in a 30-day stress period divided by high quality liquid assets) has to be greater than 100%.
• C) Covered bonds are class 1 assets.
• D) Obligations issued by central banks or government agencies are class 2 assets.

---

Definitions:

Momentum Effect

The tendency of an asset to continue moving in its current direction, whether up or down, in the financial market.

Impression

A metric used in digital marketing to represent the number of times an advertisement or social media post is displayed, regardless of whether it was clicked or not.

Norm

A standard or pattern of social behavior that is typical or expected within a particular group or culture.