XYZ Bank has to decide to lend Rs 400crs to itsborrowers of various nating classifications Howinterest rate that it can apply would vary with therating class, For AAA customer, the rate wou of 6%and for CCC customers @of 9%a. Compute the ROLS that the bank wouldgenerate by lending the entire amount either to ArtCCC customers under the minimum regulatorycapital requirement in the Basel-1 Capital Accordregime?b. What would the ROES that the Bank wouldgenerate under the minimum regulatory capitalrequirement in the Basel-Il Capital Accord regime?c. Explain the components of the total regulatorycapital requiremnet as specified by the reservebank of India under basel Ill regimeI NEED THE ANSWER IN 5 MIN PLEASE

The Basel-III framework also introduced stricter capital requirements, including the leverage ratio,…

Answered: b. What would the ROES that the Bank…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 23QTD

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Suppose that the assets of a bank consist of $200 million of retail loans (not mortgages). The PD is 1% and the LGD is 70%. What is the risk-weighted assets under the Basel II IRB approach? What are the Tier 1 and Tier 2 capital requirements?
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b. What would the ROES that the Bank would generate under the minimum regulatory capital requirement in the Basel-Il Capital Accord regime? Explain the omponents of the total regulatory