nayizhenfeng

2、The policy recommendation that focuses on internal risk and capital management is the:

A) market-based approach.
 
B) supervisory-based approach. 
 
C) legal-based approach. 
 
D) rules-based approach. 

nayizhenfeng

The correct answer is B

The supervisory-based approach focuses on internal risk and capital management. The rules-based approach implements current standards for capital adequacy. The market-based approach provides greater transparency of risk and financial structure. The legal-based approach focuses on contagion risk.

nayizhenfeng

3、Which of the following policy recommendations for the implementation of the new Basel Accord required non-financial or unregulated divisions to be independently capitalized?

A) Market-based approach.
 
B) Legal-based approach.
 
C) Supervisory-based approach.
 
D) Rules-based approach.

nayizhenfeng

The correct answer is B

Legal-based approach may require a non-financial firm to be independently capitalized.