Basel II requires that at least half of the risk-based capital ratio must take Tier 1 capital that is at least 4.5%. Question 5Select one:TrueFalse

What are the three pillars of Basel II?  A. Minimum capital requirements, supervisory review process, and market discipline  B. Credit risk, operational risk, and market risk  C. Capital adequacy ratio, risk management, and stress testing  D. Liquidity risk, leverage ratio, and counterparty credit risk

Which of the following statements regarding capital adequacy requirements is incorrect? Question 5Select one:Existing credit-risk guidelines are extended to include market risk arising from bank's trading activities.Regulators focus on credit risk, market risks, operational risk and type of capital held.Tier 2 capital is divided into upper and lower Tier 2 parts.Eligible Tier 1 capital must constitute at least 70% of a bank's capital base.

What was the primary focus of Basel I?  A. Market risk  B. Operational risk  C. Credit risk  D. Liquidity risk

In reference to Basel Accord minimum bank capital adequacy requirements, risk-weighted assetsMultiple Choicerefers to traditional bank loans.refers to a "risk-focused" approach to determining adequate bank capital.provides a level of confidence measure of the probability of the maximum loss that can occur during a period of time.none of the options.

Which new type of risk was introduced in the Basel II framework?  A. Credit risk  B. Market risk  C. Operational risk  D. Settlement risk