20-107 Which of the Following Is NOT a Criticism of the Basel

question 49

Multiple Choice

20-107 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.
• E)The weights in the four risk categories imply a cardinal measurement of relevant risk between each category.

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Definitions:

Deep South

A term often used to describe the southeastern region of the United States, known for its historical agricultural economy and significant role in American history, particularly during the Civil War and the Civil Rights Movement.

14th Amendment

An amendment to the U.S. Constitution granting citizenship to all persons born or naturalized in the United States, including former slaves, and providing all citizens with equal protection under the laws.

Freedmen

Former enslaved individuals who were emancipated, especially in the context of the United States following the Civil War.

Reconstruction

The period after the American Civil War (1865-1877) focused on rebuilding the United States, especially the South, and integrating formerly enslaved people into society.