Question 10 question still Yes or No

Question 6 2 pts Which of the following statements is true about capital requirements? Regulators prefer higher capital requirements because it provides an additional cushion to absorb losses. Bankers prefer higher capital because it is the least expensive source of financing. Higher capital requirements increase credit risk. Risk-based capital requirements allow banks ignore off-balance sheet commitments. Question 7 2 pts Why can banks with greater equity financing borrow funds cheaper than other banks? Because they have proportionately more financial leverage and hence less risk. Because a greater proportion of their assets have to be in default before they fail. Because they have less credit risk. Because they have lower required reserves. Based on the following table, does the bank have sufficient Tier 1 capital according to the Basel III standards? Recall: Tier 1 standard (including capital conservation buffer) is 8.5% and Tier 1+Tier 2 standard (including capital conservation buffer) is 10.5%. Risk-Weight Assets (SM) Risk-Weighted Category Assets ($M) 0% O 20% 450 90 50% 1,000 500 100% 1,000 1,000 TOTAL Risk-Weighted Assets 1,590 Capital ($M 120 50 150 Tier 1 Tier 2 Yes No Question 10 2 pts Based on the following table, does the bank have sufficient Tier 1+2 capital according to the Basel III standards? Recall: Tier 1 standard (including capital conservation buffer) is 8.5% and Tier 1+Tier 2 standard (including capital conservation buffer) is 10.5%. Risk-Weight Assets (SM) Risk-Weighted Category Assets ($M) 0% 150 0 20% 450 90 | 50% 1.000 500 100% 1,000 1,000 TOTAL Risk-Weighted Assets 1,590 Capital ($M) 120 50 Tier 1 Tier 2