Which of the Following Are Problems Associated with the BIS

Multiple Choice

Which of the following are problems associated with the BIS approach to calculating capital requirements for equities?

A) The approach assumes the same systematic risk factor for every stock.
B) The approach assumes the same unsystematic risk factor for every stock.
C) The approach does not fully consider the benefits from portfolio diversification.
D) The approach assumes the same systematic risk factor for every stock and the approach does not fully consider the benefits from portfolio diversification.