Which One of the Following Statements Correctly Describes the Increased

question 269

Multiple Choice

Which one of the following statements correctly describes the increased capital ratios that will come into effect under Basel III?

• A) minimum tier 1 capital of 4.5% and minimum total capital plus a conservation buffer of 10.5%
• B) minimum tier 1 capital of 6% and minimum total capital including conservation buffer of 8%
• C) minimum tier 1 capital of 4% and minimum total capital including conservation buffer of 10.5%
• D) minimum tier 1 capital of 6% and minimum total capital including conservation buffer of 10.5%

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Definitions:

Interest Income

Interest income is the revenue earned from deposit accounts or investments through the lending of money or the use of capital.

Bond Premium

The amount by which the market price of a bond exceeds its principal amount or face value.

Amortization

The process of gradually writing off the initial cost of an intangible asset over its useful life.

Long-Term Bond

A bond that matures in more than ten years, offering the bondholder a specified interest rate over a long period.