Your question is Modeling FX Impact on Capital Adequacy. Take a moment with it on the right.
Talk me through your thinking if you like. When you're confident, submit your answer and I'll grade it like a real screen (7/10 or better passes).
How do currency fluctuations affect Revolut's capital adequacy ratio, and how would you model this risk?
Explain the transmission channels from exchange rates to eligible own funds, risk-weighted assets, and the reported capital adequacy ratio. Propose a quantitative framework using historical data, stress scenarios, and simulation, including how you would validate the model and communicate uncertainty.
The question is intentionally open-ended: state any additional data and regulatory assumptions required.
