The Measurement of Credit Risk Under the Basel II Accord

question 106

Multiple Choice

The measurement of credit risk under the Basel II Accord allows banks to choose between

• A)a standardized approach similar to that used under Basel I.
• B)a basic indicator approach that will cause banks to hold an additional 12 percent of capital.
• C)an internal rating system in which they must adhere to strict methodological and disclosure standards.
• D)All of the above.
• E)Answers A and C only.

Recognize the formalities and requirements for drafting a valid will.

Understand various types of trusts and their specific purposes, including incentive trusts.

Grasp the basis for challenging a will, including undue influence and lack of witness attestation.

Differentiate between wills, trusts, and advance directives, and their functions in estate planning.

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Definitions:

Reasonable Inspection

A thorough yet fair examination or check, often used in contracts or legal contexts to ensure compliance with standards.

Warranty Action

Legal action taken to enforce the terms of a warranty, which is a guarantee provided by a seller to a buyer regarding the condition of a product.

Negligence

The failure to exercise the care that a reasonably prudent person would exercise in similar circumstances, leading to unintended harm or damage.

Proximately Caused

Refers to an event sufficiently related to a legally recognizable injury to be held as the cause of that injury.