Ultimate access to all questions.
Upgrade Now 🚀
Sign in to unlock AI tutor
How is economic capital distinguished from regulatory capital in terms of risk correlation treatment?
A
Regulatory capital considers correlations between credit, market, and operational risks, while economic capital adds them separately.
B
Both economic and regulatory capital would decrease when correlations between risks decrease.
C
Economic capital only covers expected losses, while regulatory capital covers unexpected losses.
D
Economic capital considers correlations between credit, market, and operational risks, while regulatory capital adds them separately.
