Question #3
Reading: Reading 11 Analysis of Financial Institutions
PDF File: Reading 11 Analysis of Financial Institutions.pdf
Page: 1
Status: Incorrect
Correct Answer: A
Your Answer: C
Question
When assessing capital adequacy using risk-weighted assets, cash will most likely:
Answer Choices:
A. not be included in risk-weighted assets
B. be weighted at 100%
C. be weighted over 100%
Explanation
Cash has zero risk and hence is not included in risk-weighted assets (i.e. is weighted at
zero).