Which of the Following Statements Is True

question 52

Multiple Choice

Which of the following statements is true?

• A)RAROC is the risk-adjusted return on capital.
• B)RAROC is calculated as the capital at risk divided by the loan's income.
• C)RAROC should always be below an FI's RAROC benchmark as otherwise the FI increases its default risk exposure.
• D)None of the listed options are correct.

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Definitions:

Cricoid Cartilage

A cartilage of the larynx that forms most of the posterior wall and a small part of the anterior wall.

Blood

Blood is a vital body fluid in humans and other animals that delivers necessary substances such as nutrients and oxygen to the cells and transports waste products away from those same cells.

Pleural Cavity

The thin space between the lung and the chest wall, lined by pleural membranes, containing a small amount of lubricating fluid.

Pleuritis

An inflammation of the pleura, the thin tissue layers surrounding the lungs, causing sharp chest pain.