True or false about bank capital

Exercise and reference answers

Questions

1. Statement is true

   Yes

   Statement

   A Tier 1 co-operative bank needs 9 per cent CRAR.

2. Statement is true

   No

   Statement

   Tier II may be twice the size of Tier I.

3. Statement is true

   Yes

   Statement

   Intangible assets are deducted from Tier I.

4. Statement is true

   No

   Statement

   Floating provisions can serve two purposes at once.

5. Statement is true

   No

   Statement

   PDI ranks above depositors on a claim.

6. Statement is true

   Yes

   Statement

   A bond under a year to run is discounted fully.

Instructions

Decide whether each statement is true or false.

Explanation