Capital Adequacy Ratio is a thermometer of Bank’s health. It is the ratio of a bank’s

Capital Adequacy Ratio is a thermometer of Bank’s health. It is the ratio of a bank’s __:
[A]capital to its risk
[B]risk to capital
[C]capital to assets
[D]capital to liabilities

capital to its risk
Capital Adequacy Ratio is a thermometer of Bank’s health, because it is the ratio of its capital to its risk. So simply, Capital Adequacy Ratio = Capital ÷ Risk.

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