MCT

Question 1

4 Consideration in Measuring capital adequacy/defining capital available (ASAP)

Answer 1

• Availability - is the captial fully paid and ready to absorb losses
• Subrodination - is the capital element subrodinated to the right of PHs and creditors in an insolvency/wind-up
• Absence - absence of encumbrances and mandatory serving cost
• Permanence - when capital elemence is available

Question 2

Qualified Category A Common Share

Answer 2

• Contributed surplus
• Retained earnings
• EQ, nuclear, and general contigency reserves
• Accumulated other comperhensive income (AOCI)

Retained earning & AOCI include interim profit/loss

Dividens are removed from capital available