Question
The Basel III framework proposes: a. using the gap ratio to set the capital ratio. b. relying on the rating agencies to assess the risk
The Basel III framework proposes:
| a. | using the gap ratio to set the capital ratio. |
| b. | relying on the rating agencies to assess the risk of bank assets. |
| c. | increased capital requirements and liquidity requirements for banks. |
| d. | lower capital requirements for banks to enable them to generate higher earnings to make up for their losses during the credit crisis. |
Lehman Brothers commonly used _________ as collateral when borrowing short-term funds, but its funding was cut off because prospective creditors questioned the quality of the collateral.
| a. | Treasury securities |
| b. | commercial paper |
| c. | mortgages |
| d. | its stock |
If U.S. interest rates suddenly become much higher than European interest rates (and if this does not cause concern about higher inflation in the United States), the U.S. demand for euros would ____, and the supply of euros to be exchanged for dollars would ____, other factors held constant.
| a. | increase; increase |
| b. | decrease; increase |
| c. | decrease; decrease |
| d. | increase; decrease |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started