REGULATION. Under Basel III, the combination of Core Tier 1 capital and the capital conservation buffer raises the Core Tier 1 capital ratio to

A. 7%

B. 7.5%

C. 4.5%

D. 6%

E. None of the above

QUESTION 2

REGULATION. Which of the following correctly describes "Stressed VaR" in Basel 2.5?

A. It is used as the only risk metric to calculate total capital charge for credit risk

B. It is used as an additional risk metric FOR CALCUALTING total capital charge for market risk

C. It replaces the old VaR, which was based on the historical simulation method. The old VaR was used for market risk capital.

D. Unlike the old VaR, Stressed VaR is based on a 10-day time horizon but 90% confidence level.

QUESTION 3

STOCK MARKET. If an investor successfully uses a technical trading strategy to always make abnormal profits, what level of the efficient markets hypothesis would appear to have been violated?

A. Weak form

B. Semi strong form

C. strong form

D. No violation

QUESTION 4

STOCK MARKET. The S&P 500 is _____ index while the DJIA is a ______ index

A. geometric-weighted;value-weighted

B. value-weighted; value-weighted

C. equal-weighted; value-weighed

D. value-weighted; price-weighed

E. equal-weighted; price-weighted

QUESTION 5

STOCK MARKET. You purchased 1,000 shares of a stock at $20 per share. Your margin is 80%. Later, the stock goes up in value by 20%. What is your current equity position in the stock?

A. $20,000

B. $16,000

C. $24,000

D. None of the above