Which of the Following Statements Is True

question 36

Multiple Choice

Which of the following statements is true?

• A)Under BIS, the capital charge is calculated as DEAR multiplied by the square root of 10 multiplied by 3.
• B)The idea of a minimum multiplication factor of 3 is to create a scheme that is 'incentive compatible'.
• C)Regulators can punish FIs that underestimate their capital charges by raising the multiplication factor to as high as 5.
• D)Under BIS, the capital charge is calculated as DEAR multiplied by the square root of 10 multiplied by 3 and the idea of a minimum multiplication factor of 3 is to create a scheme that is 'incentive compatible'.

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Definitions:

Freight Expenses

Costs associated with transporting goods, typically covering shipping charges, insurance, and handling fees.

FOB Absorption Pricing

A pricing strategy where the seller includes the cost of transportation to the buyer's location in the selling price of the goods.

Uniform Delivered Pricing

A pricing strategy where a seller charges the same shipping cost to all buyers, regardless of their geographic location.

Transportation Costs

are expenses incurred in moving goods from one location to another, including freight charges and fuel costs.