Question
question: A bank that seeks to increase its risk-adjusted capital ratio has a number of options at its disposal including: I. Issue new equity, such
question: A bank that seeks to increase its risk-adjusted capital ratio has a number of options at its disposal including:
I. Issue new equity, such as through a rights issue to existing shareholders, an equity offering on the open market, or by placing a bloc of shares with an outside investor.
II. Increase retained earnings by reducing the share of its profit it pays out in dividends.
III. Reduce its risk-weighted assets by replacing riskier loans with safer ones or with government securities.
which options is correct:
a) I, II and III are correct.
b)Only I is correct.
c)I and II are correct.
d)Only III is correct.
e)Only II is correct.
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