Calculation of the "Add-On" to the Risk-Based Capital Ratio to Measure

question 73

Multiple Choice

Calculation of the "add-on" to the risk-based capital ratio to measure operational risk

• A)may be done using the Basic Indicator Approach.
• B)may be done using the Standardized Approach.
• C)may be done using the Advanced Measurement Approach.
• D)All of the above.
• E)Answers A and B only.

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Definitions:

Fiscal Policy

Government policies on taxation and spending that are used to influence the economy.

Stabilization Policies

Economic strategies and actions taken by governments or monetary authorities to stabilize the economy, aiming to reduce fluctuations in the business cycle.

Milton Friedman

An American economist and Nobel Prize laureate known for his research in consumption analysis, monetary history and theory, and his advocacy of free-market capitalism.

Rational Expectations

The hypothesis that individuals form forecasts about the future based on all available information in an unbiased and consistent manner.