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2 years ago

Which of the following is true of the capital requirement? Check all that apply.

Business

2 answers:

Tom [10]2 years ago

6 0

Answer:

The correct answer is B.

Explanation:

Capital requirement, also sometimes called regulatory capital, means the standard requirement required of banks and other institutions where funds are deposited, a requirement that determines the maximum amount of capital required that the entity must maintain as a proportion of a certain level of assets according to the regulations of regulatory agencies such as the Bank for International Settlements, the Federal Deposit Insurance Corporation or the Federal Reserve Council. These capital requirements are imposed to ensure that these institutions do not participate or maintain investments that can increase their risk of bankruptcy and that they have sufficient capital to maintain their operational losses while still being able to take care of new withdrawals.

Nady [450]2 years ago

6 0

The intended goal of the capital requirement is to protect the interest of those who hold equity in the bank and also the higher the percentage of assets holds as loans, the higher the capital requirement. Therefore, the correct answer is A and B

Capital requirements refer to the exact amount of capital a bank or other depository institutions must have in line with the requirements of its financial regulator.

<h2>Further Explanation </h2>

Capital requirements are put in place by the financial regulator to protect the interest of the depositors in case of a market crash, recession or financial crises

Capital requirements are also put in place to make sure that the activities of banks and other financial institutions are dominated by investors. The capital requirements are also to ensure that banks have the required amount of capital to take care of operating loses while depositors can still be able to withdraw.

The advantages of capital requirement include:

It ensures depositors have access to their money.

It provides measures to evaluate and financial institution

It ensures that banks and other depository organizations can meet up with their financial obligations.

Some disadvantages of capital requirements include:

It negatively affects the banks’ ability to invests
It reduces access to credit and loans.

Some of the regulatory institutions that set capital requirement include

Bank for international settlement
Federal Reserve board
Federal deposit insurance cooperation

LEARN MORE:

Which of the following is true of the capital requirement? Check all that apply. brainly.com/question/13789384
Which of the following is true of the capital requirement? Check all that apply. brainly.com/question/13108033

KEYWORDS:

capital requirements
percentage of assets
equity
loans
interest

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During the year, Bonita Industries made an entry to write off a $33300 uncollectible account. Before this entry was made, the ba

kozerog [31]

Answer:

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When the allowance for uncollectibles is maintained the allowance for uncollectibles method is used in which allowance for uncollectibles is deducted from the accounts receivables.

Explanation:

If the method of allowance for uncollectibles is used the amount of allowance for uncollectibles is deducted from the accounts receivables.

Bonita Industries

Accounts Receivable $397000

Less Allowance For Uncollectible $33700

Net Accounts Receivable $363300

IF the direct write off method is used the bad debts are directly deducted from the accounts receivable.

Bonita Industries

Accounts Receivable $397000

Less Uncollectibles $33300

Net Accounts Receivable $363700

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2 years ago

Nova Electrics anticipates cash flow from operating activities of $12 million in 20X1. It will need to spend $9.5 million on cap

Ulleksa [173]

Answer:

$1.78 million

Explanation:

Firm’s projected free cash flow for the year 20X1:

= cash flow from operating activities - capital investment - Common stock dividend - preferred stock dividend

= $12 million - $9.5 million - $0.40 million - $0.32 million

= $1.78 million

Therefore, the firm’s projected free cash flow for the year 20X1 is $1.78 million.

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2 years ago

There are three economy situations and two stocks Information is as follows Economy Stock A Stock B Booming 0.3 10 20 Neutral 0.

Bumek [7]

Answer:

a) A = 4.50% and B = 2.00%

b) SD for A = 4.15 %

c) Portfolio Return = 3.0%

Explanation:

a) Expected Returns for Both A and B respectively:

In order to calculate the expected returns, let's categorize the given data first.

Economy Probability Stock A Stock B

Booming 0.30 10% 20%

Neutral 0.30 5% 0%

Recession 0.40 0% -10% (not 10%)

So,

Expected Return for Stock A:

A = Sum of (all Probability x Stock A)

A = (0.30 x 0.10) + (0.30 x 0.05) + (0.40 x 0.00)

A = 0.045

A = 4.50 %

Return for Stock B:

B = Sum of all Probability x Stock B

B = (0.30 x 0.20) + (0.30 x 0.00) + (0.40 x -0.10)

B = 0.002

B = 2.0%

b) Standard Deviation /Risk for Stock A:

SD for A = Sum (Square Root (Probability*(Stock A Return - Expected Return of Stock A)²) )

SD for A = $\sqrt{0.30*(0.10-0.045)^2 + 0.30*(0.05-0.045)^2+0.40*(0.00-0.045)^2}$

SD for A = 0.0415

SD for A = 4.15%

c) Portfolio Return Given that:

Value Weight Return

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Stock B 6000 0.6 2.0%

10000

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= (0.4 x 0.045) + (0.6 x 0.02)

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2 years ago

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Answer:

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irina [24]

Answer:

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