Which of the Following Statements Is True in the Context

question 26

Multiple Choice

Which of the following statements is true in the context of Basel II?

• A)The standardised approach is the most basic approach to calculating operational risk capital.
• B)FIs can choose whether or not to hold operational risk capital.
• C)In the basic indicator approach, operational risk capital is calculated as a fixed percentage of an FI's gross income figure, whereby gross income is defined as gross interest income plus gross non-interest income.
• D)None of the listed options are correct.

---

Definitions:

Total Surplus

The combined benefit that both consumers and producers receive from a transaction, comprising consumer and producer surplus.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service (indicated by the demand curve) and the total amount that they actually do pay (i.e., the market price).

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, often reflecting gains from trade.

Tariff Revenue

Income generated by a government from imposing tariffs on imported goods.