20-109 the Primary Difference Between Basel I and the Proposed

question 44

Multiple Choice

20-109 The primary difference between Basel I and the proposed Basel II in converting OBS values to on-balance-sheet credit equivalent amounts is

• A)the use of credit ratings in Basel II to assign credit risk weights on the OBS activities.
• B)the use of six weight classes by Basel II rather than four classes.
• C)the use of the underlying counterparty activity in Basel II to assign credit risk weights on the OBS activities.
• D)All of the above.
• E)Answers A and C only.

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Definitions:

Sales Budget

A financial plan detailing the expected revenues from sales of products or services over a specific period.

Production Budget

An estimate of the total units that must be produced in a given period to meet sales demands and ending inventory requirements.

Selling Expense Budget

A financial plan that estimates the anticipated selling expenses for a period, including costs related to sales personnel, advertising, and marketing activities.

Sales Commissions

Payments made to sales employees, usually calculated as a percentage of the sales they generate.