- CFA Exams
- CFA Level I Exam
- Study Session 5. Financial Reporting and Analysis (1)
- Reading 16. Analysis of Financial Institutions
- Subject 2. Analyzing a Bank: The CAMELS approach
CFA Practice Question
The management capabilities in the CAMELS framework refer to bank management's ability to:
II. manage risk
III. comply with laws and regulations
I. identify and exploit profit opportunities
II. manage risk
III. comply with laws and regulations
Correct Answer: I, II and III
It refers to the bank management's ability to identify and exploit appropriate profit opportunities and simultaneously manage associated risks. It covers management's ability to ensure the safe operation of the institution as they comply with the necessary and applicable internal and external regulations.
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