Which of the Following Are Problems Associated with the BIS

question 54

Multiple Choice

Which of the following are problems associated with the BIS approach to calculating capital requirements for equities?

• A)The approach assumes the same systematic risk factor for every stock.
• B)The approach assumes the same unsystematic risk factor for every stock.
• C)The approach does not fully consider the benefits from portfolio diversification.
• D)The approach assumes the same systematic risk factor for every stock and the approach does not fully consider the benefits from portfolio diversification.

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Definitions:

Sales And Profitability

measures of the effectiveness of a company's operations; where sales refer to the revenue from goods or services sold, and profitability is the extent to which this revenue exceeds the costs incurred.

Historical Approach

A method of research that examines past events and developments to understand the present and anticipate future trends.

Desired Performance

A target level of performance set by an individual or organization to achieve specific goals.

Actual Performance

The real, observed outcomes of a person's work or the execution of a specific task.