Which of the Following Are Problems in Using the Leverage

question 33

Multiple Choice

Which of the following are problems in using the leverage ratio as a measure of capital adequacy?

• A)Even with a low leverage ratio, an FI could have a negative market value net worth.
• B)The different types of risks, such as credit or interest rate risk are not captured.
• C)Off-balance-sheet activities are not captured.
• D)Even with a low leverage ratio, an FI could have a negative market value net worth, the different types of risks, such as credit or interest rate risk are not captured and off-balance-sheet activities are not captured.

---

Definitions:

Graphics Tablet

A device that allows users to draw or write with a stylus or pen-like tool, translating the motion onto a computer screen.

Digital Camera

An electronic device that captures and stores photographs in digital format, allowing for easy transfer to computers or other devices.

Legitimate Organizations

Refers to officially recognized and authorized entities that operate under legal frameworks.

Personal Information

Detailed data or specifics about an individual, including names, addresses, phone numbers, and often sensitive data like social security numbers.