A Deficiency of the Risk-Based Capital Ratio Is That It

question 43

True/False

A deficiency of the risk-based capital ratio is that it measures the ability of a bank to meet both the on- and off-balance-sheet credit risk, but not the interest rate or market risks.

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Definitions:

Memory

The cognitive process involving the encoding, storing, and retrieving of information experienced or learned.

Encoding Failure

an inability to properly store information into long-term memory, leading to the absence of memory recall.

Recall

The mental process of retrieving information from the past, which can vary in ease depending on several factors like recency and relevance.

Declarative Memories

Memories that can be consciously recalled, such as facts and events, and expressed verbally.