All categories

4 years ago

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

Business

2 answers:

Tom [10]4 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]4 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

You might be interested in

Investment bankers who join together to share the financial risk associated with buying an entire issue of new securities and re

Harrizon [31]

Answer:

Explanation:

Syndicate is a group of investment banks that work together to sell new security offerings to investors. The underwriting syndicate is led by the lead underwriter.

The issuing firm may decide that several underwriters are needed to underwrite the equity.

The size of the syndicate varies.

The primary underwriter is designated the Lead underwriter.

The lead underwriter allocates portions of the offering to syndicate members.

Syndicate members may be lead underwriters on other offerings, so the relationships are frequently based on equal stature in terms of mutual respect.

5 0

3 years ago

On May 1, Pierce Company purchased $60,000 of Stanton Company’s 12% bonds at 100 plus accrued interest of $2,400. On June 30, Pi

8_murik_8 [283]

Answer:

Total proceeds = 52000

Explanation:

given data

purchased = $60,000

rate = 12 % = 0.12

sold = $50,000

accrued interest = $2,400

solution

we get here Total proceeds that will be express as

Total proceeds = [ sold × accrued interest ] + [ sold × rate × 1 ] ................1

put here value in equation 1 and we will get

Total proceeds = [ 50000 × 1.03 ] + [ 50000 × $\frac{.12}{12}$ × 1 ]

Total proceeds = 51500 + 500

Total proceeds = 52000

6 0

3 years ago

Goods in transit which are shipped f.o.b. shipping point should be

mash [69]

Answer: The correct answer is "B. included in the inventory of the buyer."

Explanation: Goods in transit which are shipped f.o.b. (free on board) shipping point should be included in the inventory of the buyer

If the goods are shipped F.O.B, as soon as the goods leave the seller's trade, the seller can declare the sale as completed and complete.

5 0

3 years ago

Read 2 more answers

I need to know what base means in automotive iv got to take my first test tommorow so please help asas

Leokris [45]

the term base model is generally used to describe a car's bottom-level trim, which often goes unnamed. For example, say a car is sold in three trim levels, the Car, the Car LX and the Car RS.

6 0

3 years ago

A project has annual depreciation of $17,900, costs of $90,500, and sales of $131,500. the applicable tax rate is 40 percent. wh

marin [14]

The operating cash flow is $31,760.

<h3>What is operating cash flow?</h3>

In financial accounting, operating cash flow (OCF), cash flow provided by operations (CFO), cash flow from operating activities (CFO), or free cash flow from operations (FCFO) refers to the amount of cash generated by a company from its revenues, excluding costs associated with long-term capital investment or securities investment.
Operating activities comprise any spending or cash sources involved in a company's day-to-day business operations.
Operating cash flow is defined by the International Financial Reporting Standards as cash generated from activities less taxation and interest paid.

To calculate the operating cash flow:

Operating Cash Flow = Operating Income + Depreciation – Taxes + Change in Working Capital
(131,500-90,500)(1-0.40)+(17,900×0.40)
= $31,760

Therefore, the operating cash flow is $31,760.

Know more about operating cash flow here:

brainly.com/question/735261

#SPJ4

3 0

2 years ago