Bank L's balance sheet(in millions) is provided below.The bank does not have any off-balance-sheet activity. 1.Please calculate Tier 1 risk-based capital ratio of the bank. 2.Please calculate the total risk-based capital ratio of this bank.
Bank L's balance sheet(in millions) is provided below.The bank does not have any off-balance-sheet activity. 1.Please calculate Tier 1 risk-based capital ratio of the bank. 2.Please calculate the total risk-based capital ratio of 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
Problem 1PS
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Bank L's
1.Please calculate Tier 1 risk-based capital ratio of the bank.
2.Please calculate the total risk-based capital ratio of this bank.
| Assets | Liabilities and Equity | ||
| Cash | $20 | Deposits | $980 |
| Treasury bonds(risk-weight=0) | $40 | Subordinated debentures | $25 |
| Mortgate loans(risk-weight=50%) | $600 | Common Stock | $45 |
| Business Loans | $430 | $40 | |
| Total assets | $1090 | Total liabilities and equity | $1090 |
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