By taking 20% of the total derivative notional amount.

By identifying the largest absolute net 30-day collateral flow realized during the preceding 24 months.

By calculating the average daily margin call over the last 30 days.

By using a fixed 5% factor on all derivative liabilities. [H2]High-Yield Core Concepts[/H2] [CORE_CONCEPTS] [C]**30-Day Stress Horizon:** The LCR promotes short-term resilience by requiring banks to maintain sufficient **High Quality Liquid Assets** to survive a severe 30-day financial shock.[/C] [C]**Strict Haircuts and Caps:** Under the **RBI Liquidity Framework**, Level 1 assets face zero haircuts, whereas Level 2 assets are strictly capped at 40% of the overall stock.[/C] [C]**Deposit Run-Off Dynamics:** Stable retail deposits feature a 5% run-off, while operational deposits drastically increase **Net Cash Outflows** by incurring a 25% run-off rate.[/C] [C]**Severe Downgrade Assumptions:** **Basel III Liquidity Standards** mandate that banks assume a severe 3-notch credit rating downgrade and collateral substitution risks during stress testing.[/C] [/CORE_CONCEPTS] [H2]Semantic Comparison: Liquidity Coverage Ratio (LCR) vs Net Stable Funding Ratio (NSFR)[/H2] [VERSUS_TABLE] | Feature / Metric | Liquidity Coverage Ratio (LCR) | Net Stable Funding Ratio (NSFR) | | **Core Definition** | Maintains HQLA to cover total net cash outflows over 30 days. | Ensures stable funding profiles in relation to off-balance sheet activities over 1 year. | | **Primary Use Case** | Surviving immediate, short-term liquidity shocks. | Promoting long-term structural funding resilience. | | **Exam Importance** | Highly tested on HQLA caps, haircuts, and run-off percentages. | Frequently tested as the complementary long-term Basel III metric. | [/VERSUS_TABLE] [FAQ_BOX][H2]Frequently Asked Questions[/H2] [FAQ_ITEM][Q]Why is **Liquidity Coverage Ratio (LCR)** critical for **RBI Grade B Exam, SBI PO, IBPS PO, and Bank Promotion Exams**?[/Q][A]It is a consistently high-scoring area. Examiners frequently repeat core concepts from this section, especially regarding Basel III guidelines and RBI's liquidity framework.[/A][/FAQ_ITEM] [FAQ_ITEM][Q]Does this mock test cover the full syllabus?[/Q][A]Yes, these questions target the most highly-weighted concepts found in previous years' papers, spanning HQLA rules, run-off rates, and stress scenarios.[/A][/FAQ_ITEM] [FAQ_ITEM][Q]What are the most repeated topics?[/Q][A]Based on our blueprint, HQLA Classifications & Haircuts and Deposit Run-off Rates carry the highest weightage.[/A][/FAQ_ITEM] [/FAQ_BOX]