Tier II (Supplementary)capital Includes Which of the Following

question 37

Multiple Choice

Tier II (supplementary) capital includes which of the following?
I. Allowance for loan and lease losses,up to 1.25 percent of risk-weighted assets
II. Subordinated debt not maturing within five years (max amount = 50 percent of Tier 1 capital)
III. Common stock and retained earnings
IV. Nontransaction deposits

• A)II and III only
• B)I and IV only
• C)I and II only
• D)I,II,and III only
• E)I,III,and IV only

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Definitions:

Closed at Par

A situation where a bond or preferred stock is bought or sold at its face value.

Dividend Yield

The Dividend Yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price, providing investors with insight into the income generated from an investment in its shares.

Price Appreciation

An increase in the value of an asset or investment over time.

Rate of Return

A measure of the profitability of an investment, calculated as a percentage of the original cost of the investment.