Which Position Below Is NOT a Component of Common Equity

question 231

Multiple Choice

Which position below is NOT a component of common equity Tier 1 capital?

• A) innovative hybrid capital instruments with incentives to redeem
• B) common shares issued by bank
• C) retained earnings
• D) stock surplus (share premium)

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Definitions:

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, typically visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Purchasing Power Parity

An economic theory that compares different countries' currencies through a "basket of goods" approach, aiming to equalize purchasing power by taking into account inflation rates and cost of living.

Exchange Rate

The worth of one currency relative to another for conversion purposes, establishing the amount of one currency that can be swapped for another.

Canadian Dollar

The currency of Canada, represented by the symbol CAD or C$ and divided into 100 cents.