The CAR Requires ADI's to Hold Capital as a Proportion

question 31

Multiple Choice

The CAR requires ADI's to hold capital as a proportion of their risk-adjusted assets.The reasons for this do NOT include:

• A)capital contributes to an ADIs financial strength and stability
• B)capital reflects a commitment by the owners, as they face the risk of loss
• C)capital can sustain solvency when an ADI makes unexpected losses
• D)capital represents a reserve of funds that can be drawn on if required
• E)because shareholder's face the risk of loss, capital motivates prudent behaviour by an ADI's management.

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Definitions:

Black Schools

Black schools were educational institutions specifically for African American students, particularly during segregation in the United States, offering a space for learning in a racially divided society.

National Association

A general term for organizations that operate across an entire nation, representing interests in various fields like civil rights, professional standards, or sports.

Colored Women

An outdated term historically used to refer to women of non-white or mixed racial heritage, now considered derogatory and no longer in appropriate use.

Talented Tenth

A term popularized by W.E.B. Du Bois referring to the supposed ten percent of African Americans who could lead the race to greater advancements through higher education and intellectual achievement.