Which of the Following Are the Two Basic Approaches to Analysing

question 4

Multiple Choice

Which of the following are the two basic approaches to analysing the cost functions of FIs?

• A)basic indicator approach and standardised approach
• B)standardised approach and advanced measurement approach
• C)production approach and intermediation approach
• D)basic indicator approach and advanced measurement approach

---

Definitions:

Cross-Hedging

A strategy used to manage risk by hedging a position in one asset with a position in another asset that has a similar price movement but is not identical.

Bauxite

The primary ore of aluminum, consisting primarily of aluminum oxide minerals, clay minerals, and insoluble materials.

Aluminum Ore

The natural mineral compound from which aluminum is extracted, primarily bauxite.

Aluminum Futures

Contracts to buy/sell aluminum at a future date at a price agreed upon today, used for hedging or speculation on the aluminum market.