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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