As a bank's assets become less risky, its

Name: As a bank's assets become less risky, its
Brand: Quizplus
Rating: 4.9 (53 reviews)

Question

Quizplus · Accepted Answer

As a bank's assets become less risky, its risk-based capital ratio falls. This is because the risk-based capital ratio is a measure of a bank's capital relative to its risk-weighted assets. As a bank's assets become less risky, the risk-weighting of its assets decreases, which in turn causes the risk-based capital ratio to fall.

As a Bank's Assets Become Less Risky, Its