The Liquidity Coverage Ratio (LCR) in Basel III

question 245

Multiple Choice

The Liquidity Coverage Ratio (LCR) in Basel III:

• A) is a new rule that compares liquid asset levels in banks to their available equity capital
• B) spells out a modernized system for calculating the required minimum reserve that banks must hold at the central bank
• C) compares liquid and reliably liquidating assets to expected cash outflows from specified run-off rates for various liability classes under a short-term stress scenario
• D) tied directly into the internal ratings-based approach for determining the liquidity of credit-counterparties

Analyze the role of government in market economies, including its power to coerce and how it affects economic efficiency and private-sector risk.

Understand the concept of government failure, its causes, and consequences.

Examine the mechanisms of political processes and their impact on economic policies and outcomes.

Discuss the efficiency of public versus private bureaucracies in resource utilization.

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Definitions:

Dollar Volume

The total value of shares traded over a specific time period.

TSX

The Toronto Stock Exchange, a major stock exchange located in Toronto, Canada.

Venture Exchange

A marketplace meant for trading the stocks and securities of smaller or emerging companies.

Agency Problem

A conflict of interest inherent in any relationship where one party is expected to act in another's best interests, such as between shareholders (principals) and company executives (agents).