Bank Assets Risk Weight Bank Liabilities $ 2,000 $ 1,000 $ 1,500 Cash and Treasury Securities Repurchase Agreements Municipal Bonds Single Family Home Mortgages $ 2,700 CMOS Commercial Loans Agricultural Loans Allowance for Loan Loss Bank Buildings Total 0% Deposits 20% Hot Money 20% Subordinated Debt 8,000 6,000 250 $ $ $ 50% Common Stock 2$ 100 $ 2,500 $ 1,500 $ 2,100 $ (300) $ 2,000 $ 15,000 50% Surplus 100% Retained Earnings 2$ 300 2$ 350 100% 0% 100% $ 15,000 1. Calculate the minimum leverage capital for this bank.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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100%
Risk Weight
Bank Liabilities
$
Bank Assets
Cash and Treasury Securities
Repurchase Agreements
Municipal Bonds
Single Family Home Mortgages $ 2,700
CMOS
Commercial Loans
Agricultural Loans
Allowance for Loan Loss
Bank Buildings
Total
$ 2,000
$ 1,000
$ 1,500
0% Deposits
20% Hot Money
20% Subordinated Debt
8,000
2$
6,000
24
250
50% Common Stock
2$
100
$ 2,500
$ 1,500
$ 2,100
$ (300)
$ 2,000
$ 15,000
50% Surplus
100% Retained Earnings
2$
300
2$
350
100%
0%
100%
2$
15,000
1. Calculate the minimum leverage
capital for this bank.
Transcribed Image Text:Risk Weight Bank Liabilities $ Bank Assets Cash and Treasury Securities Repurchase Agreements Municipal Bonds Single Family Home Mortgages $ 2,700 CMOS Commercial Loans Agricultural Loans Allowance for Loan Loss Bank Buildings Total $ 2,000 $ 1,000 $ 1,500 0% Deposits 20% Hot Money 20% Subordinated Debt 8,000 2$ 6,000 24 250 50% Common Stock 2$ 100 $ 2,500 $ 1,500 $ 2,100 $ (300) $ 2,000 $ 15,000 50% Surplus 100% Retained Earnings 2$ 300 2$ 350 100% 0% 100% 2$ 15,000 1. Calculate the minimum leverage capital for this bank.
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