The Following Are the Advantages of Basel II Over Basel

question 70

Multiple Choice

The following are the advantages of Basel II over Basel I except that:

• A)it performs supervisory review of each bank's risk-assessment procedures.
• B)it provides for greater sensitivity to arbitrage and financial innovations.
• C)it applies the same minimum capital requirements to all banks.
• D)it broadens the types of risk considered.
• E)All are advantages of using Basel II.

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Definitions:

Flat Tax

A tax system with a constant tax rate applied to all levels of income, opposing progressive tax systems where rates increase with income.

Tax Burden

The measure of the total amount of taxes that an individual or business must pay, expressed as a percentage of income or profits.

Average Tax Rate

The proportion of the total tax paid to the total taxable income, calculated by dividing the total tax amount by the taxable income.

Marginal Tax Rate

The percentage of tax applied to your income for each tax bracket in which you qualify, essentially the rate at which your last dollar of income is taxed.