Which of the Following Is NOT a Criticism of the Basel

question 124

Multiple Choice

Which of the following is NOT a criticism of the Basel I risk-based capital ratio?

• A)All commercial loans are given equal weight regardless of the credit risk of the borrower.
• B)The ratio incorporates off-balance-sheet risk exposures.
• C)Grouping assets into different risk categories may encourage balance sheet asset allocation games.
• D)The treatment does not include interest rate or foreign exchange risk.

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Definitions:

Security Needs

Denotes the essential protection and safety measures individuals or entities seek to ensure their well-being and safeguard against risks.

Maslow's Hierarchy

is a psychological theory proposed by Abraham Maslow that ranks human needs in a pyramid, from basic physical needs to higher-level psychological needs and self-actualization.

Organization

Any group or aggregation of individuals into a purposeful entity, such as those found in business and industry, government, and the social community; also, the process of aligning people and resources to accomplish tasks (visions, goals, initiatives, and the like).

Recognition Needs

The requirement for acknowledgment and appreciation from others, often as a motivator in workplace settings.