Which of the following is a measure of the level of capital that an institution needs to hold in

order to maintain a desired credit rating?

A$.$ Regulatory capital

B$.$ Shareholders' equity

C$.$ Book value

D$.$ Economic capital

Which of the following statements are true:

I. Capital adequacy implies the ability of a firm to remain a going concern

II$.$ Regulatory capital and economic capital are identical as they target the same objectives

III. The role of economic capital is to provide a buffer against expected losses

IV$.$ Conservative estimates of economic capital are based upon a confidence level of $100\%$

A$.$ III

B$.$ I, III and IV

C$.1$

D$.$ I and III

Which of the following can be used to reduce credit exposures to a counterparty:

I. Netting arrangements

II$.$ Collateral requirements

III. Offsetting trades with other counterparties

IV$.$ Credit default swaps

A$.$ I, II and IN

B$.$ I, II$,$ III and IV

C$.$ III and $NV$

D$.$ I and II

When considering a request for a loan from a retail customer, which of the following factors

is relevant for a bank to consider:

A$.$ The credit worthiness of the retail customer

B$.$ The other retail loans in its portfolio

C$.$ The contribution this new loan would bring to total portfolio risk

D$.$ All of the above