Economics · Banking and Financial Institutions
Which of the following formulas correctly represents the Capital Adequacy Ratio (CAR)?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1(Tier I Capital + Tier II Capital) ÷ Risk-Weighted Assets✓
- 2(Equity Share Capital + Borrowed Funds) ÷ Total Assets
- 3Equity Share Capital ÷ Total Assets
- 4(Tier I Capital + Tier II Capital) ÷ Risk-Free Assets
Correct answer
(Tier I Capital + Tier II Capital) ÷ Risk-Weighted Assets
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