2006 Quarter Two

Question 1 of 6

Implementation of Basel II begins in January 2007. One potential implication of this is the possibility of increased use of Money Market Funds (MMFs).

Which of the following accurately describes the difference in treatment of MMFs between Basel I and Basel II?

	Under Basel I an investment in MMFs attracted a 50% risk weighting; under Basel II it will be treated as a corporate loan.
	Under Basel I an investment in MMFs attracted a 100% risk weighting; under Basel II it will be treated as an interbank deposit.
	Under Basel I an investment in MMFs was treated as a residential mortgage; under Basel II it will be treated as an interbank deposit.
	Under Basel I an investment in MMFs was treated as an interbank deposit; under Basel II it will be treated as a corporate loan.

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2006 Quarter Two

Question 1 of 6