Under the Standardized Approach in the Basel II Accord, what is the risk weight of...

Comprehensive and Detailed In-Depth Explanation:

Under Basel II’s Standardized Approach, non-performing loans (NPLs) past due >90 days receive higher risk weights. For corporate loans:

150% risk weight applies if no specific provision exists and payments are >90 days overdue (Option A).

If provisions cover <20% of the outstanding amount, it’s still 150%; if >20%, it drops to 100%. Option B is incorrect (100% requires provisions). Options C and D misalign with Basel II’s criteria (no 200% or 120-day rules).

Exact Extract from Official Source:

BCBS, "Basel II: International Convergence of Capital Measurement and Capital Standards," June 2006, para. 67: "Claims on corporates that are past due for more than 90 days will be risk-weighted at 150% unless specific provisions have been set aside… If provisions exceed 20% of the outstanding amount, the risk weight is reduced to 100%."

GARP FRR Study Notes, Credit Risk Section: "Non-performing corporate loans under the Standardized Approach are assigned a 150% risk weight when unprovisioned and overdue by more than 90 days."