Tier 2 Capital: Definition, Ratio & Calculation


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What is Tier 2 Capital commonly known as?

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1. The primary difference between Tier 1 Capital and Tier 2 Capital is _____.

2. Which of the following is NOT Tier 2 Capital?

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About This Quiz & Worksheet

This quiz and worksheet combo help you be sure you know what Tier 2 Capital is. Answer questions about how this form of capital works and the formula used to discover it.

Quiz & Worksheet Goals

Use these questions to see if you understand:

  • The different types of Tier 2 Capital
  • Other terms for Tier 2 Capital
  • The accepted Tier 2 Capital ratio

Skills Practiced

  • Reading comprehension - ensure that you draw the most important information from the material, such as the formula used to find Tier 2 Capital ratio
  • Distinguishing differences - compare and contrast topics from the lesson, such as Tier 1 and Tier 2 Capital
  • Information recall - access the knowledge you've gained regarding the name Tier 2 Capital is commonly known as

Additional Learning

If you would like to know more about this type of financing, read the lesson titled Tier 2 Capital: Definition, Ratio & Calculation. New topics covered include:

  • Revaluation reserves
  • Hybrid security
  • Subordinate debt
  • Undisclosed reserves