1. The bank's assets are $1M of cash, $50M of commercial loans, $9M of Treasury bonds, and $100M of mortgages. The bank also has $140M of non-transaction deposits and $10M of preferred stock that matures in ten years. The allowance for loan losses is $3M. a. Calculate the total assets b. Calculate the risk-adjusted assets c. What are the common equity Tier I (CET1) risk-based capital ratio, Tier I risk-based capital ratio, the total risk-based capital ratio, and the total capital (leverage) ratio?

1. The bank's assets are $1M of cash, $50M of commercial loans, $9M of Treasury bonds, and $100M of mortgages. The bank also has $140M of non-transaction deposits and $10M of preferred stock that matures in ten years. The allowance for loan losses is $3M. a. Calculate the total assets b. Calculate the risk-adjusted assets c. What are the common equity Tier I (CET1) risk-based capital ratio, Tier I risk-based capital ratio, the total risk-based capital ratio, and the total capital (leverage) ratio?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The bank's assets are $1M of cash, $50M of commercial loans, $9M of Treasury bonds, and $100M of
mortgages. The bank also has $140M of non-transaction deposits and $10M of preferred stock that matures in ten
years. The allowance for loan losses is $3M.
a. Calculate the total assets
1.
b. Calculate the risk-adjusted assets
120
c. What are the common equity Tier I (CET1) risk-based capital ratio, Tier I risk-based capital ratio, the total risk-based
capital ratio, and the total capital (leverage) ratio?

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