Question #15
Reading: Reading 11 Analysis of Financial Institutions
PDF File: Reading 11 Analysis of Financial Institutions.pdf
Page: 5
Status: Correct
Correct Answer: A
Question
When analyzing a bank, important attributes that the CAMELS approach to assessing bank soundness does not address are most likely to include:
Answer Choices:
A. corporate culture, exposure to currencies, and segment information
B. capital adequacy, asset quality, management capabilities
Explanation
In addition to the CAMELS components, important attributes deserving analysts' attention
include government support, the bank's mission, corporate culture and competitive
environment, off-balance-sheet items, segment information, currency exposure, and risk
disclosures. CAMELS itself focuses on a bank's: capital adequacy, asset quality,
management capabilities, earnings sufficiency, liquidity position, and sensitivity to market
risk.