10-56 the Capital Requirements of Internally Generated Market Risk Exposure

question 66

Multiple Choice

10-56 The capital requirements of internally generated market risk exposure estimates can be met

• A)only with two types of capital.
• B)only with Tier 1,Tier 2,or Tier 3 capital.
• C)with retained earnings and common stock only.
• D)only with retained earnings,common stock,and long-term subordinated debt.
• E)only with short- or long-term subordinated debt.

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Definitions:

Declining-Balance

A method of depreciation where an asset loses value at a rate that decreases over time, opposite of straight-line depreciation.

Useful Life

The estimated duration of time an asset is expected to be useful and productive for the purpose it was acquired.

Replace The Asset

The process of substituting an existing asset with a new or improved version, often due to obsolescence, wear, or technological advances.

Obsolescence Factors

Elements that contribute to the decline in value and usefulness of assets over time, affecting their depreciation.