To Be Considered Adequately Capitalized, a Bank's Minimum Tier 1

question 22

Multiple Choice

To be considered adequately capitalized, a bank's minimum Tier 1 capital, total capital, and leverage capital must be:

• A) 4%, 8%, and 3%, respectively.
• B) 8%, 5%, and 3%, respectively.
• C) 10%, 10%, and 10%, respectively.
• D) 6%, 10%, and 5%, respectively.
• E) 3%, 4%, and 8%, respectively.

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Definitions:

Igneous

Pertains to rocks or minerals that have solidified from molten or partially molten material, indicative of volcanic or magmatic origin.

Metamorphic

Rock that has undergone transformation through heat, pressure, or chemically active fluids, altering its original composition or structure.

Sedimentary

Relating to rocks formed by the accumulation and consolidation of mineral and organic particles deposited by water, air, or ice.

Clastic

A material consisting of pieces (clasts) derived from preexisting rocks; usually formed on Earth’s surface in low-temperature environments; syn. detrital.