The CAR encourages banks to hold assets in the lower-risk categories.

Name: The CAR encourages banks to hold assets in the lower-risk categories.
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Question

Quizplus · Accepted Answer

The CAR (Capital Adequacy Ratio) is a regulatory requirement that mandates banks to maintain a minimum amount of capital based on the risks their assets carry. Banks are encouraged to hold assets in the lower-risk categories as they require less capital requirements, which helps to maintain the CAR. Therefore, the statement is true.

The CAR Encourages Banks to Hold Assets in the Lower-Risk