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1. From a regulatory perspective, what is the impact on book value capital of a 25 basis point decrease in interest rates if the FI is holding a 20-year, fixed-rate, 11 percent annual coupon $100,000 par value bond?

A decrease of $250.

An increase of $250.

An increase of $2,023.

A decrease of $1,959.

No impact on capital since the book value is unchanged.

2. Regulatory-defined capital and required leverage ratios are based in whole or in part on

market value accounting concepts.

book value accounting concepts.

the net worth concept.

the economic meaning of capital.

None of the above.

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92844378

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