3、Basel II does NOT allow calculation of risk-based capital under the:

A) external probability approach. 

B) internal ratings-based advanced approach. 

C) internal ratings-based foundation approach. 

D) standardized approach.

The correct answer is A

There is no such approach denoted “external probability.”

4、Under Basel II, collateral is deducted from exposure at default (EAD) under which approach to calculating capital requirements?

A) Foundation IRB approach. 

B) Advanced IRB approach. 

C) All of these.

D) Standardized approach.

The correct answer is D

Only the standardized approach allows collateral to be deducted from exposure at default (EAD).