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Which statement is not correct about Capital Adequacy Ratio ?

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Which statement is not correct about Capital Adequacy Ratio ?
  • AIt is a thermometer of Bank™s Health.
  • BIt is the ratio of its Capital to its Risk.
  • CIt can indicate the Capacity of the Bank™s ability to absorb the possible losses.
  • DA good CAR makes vulnerable to the Depositors and lose faith in the banking system.
Correct answer: D

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CCommunity
A good CAR makes vulnerable to the Depositors and lose faith in the banking system.