Which of the following statements regarding economic capital is correct?

Question

Options

• AEconomic capital is calculated externally and is the amount of capital the firm should have to support
• BEconomic capital is calculated on an expected shortfall basis with a specific time horizon and confidence level.
• CEconomic capital is used for measuring and reporting risks across a financial organisation.
• DEconomic capital is always lower than regulatory capital because of the more adequate modelling of

• A
  13% (3)
• B
  4% (1)
• C
  79% (19)
• D
  4% (1)

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