(1)CommonEquity Tier 1Risk-BasedRatioZone1. Well capitalized 6.5% or above and 8% orabove2. Adequatelycapitalized3. Undercapitalized4. Significantly45% or above and 6% oraboveUnder 4.5%undercapitalized Under 3%Under 6%or Under 6%5. Criticallyundercapitalized Tangible equity/Total assets 52%(2)Tier IRisk-BasedRatinorundercapitalized.well capitalized.adequately capitalized.6TotalRisk-BasedRatioand 10% oraboveofand 8% or above and 4% oraboveUnder 8%and 5% oraboveTier1LeverageRatiooror Under 8% ofUnder 4%Under 4%Capital Directive/Otherand Not subject to a capitaldirective to meet a specificlevel for any capitalmeasureand Does not meet thedefinition of wellcapitalizedA bank has CET 1 capital of $50 million, Tier I capital of $90 million and Tier II capital of $70 million. The bank has risk-weighted assets of $2,017.6 million. Bacapital ratio, this bank is:significantly undercapitalized.

Name: (1)CommonEquity Tier 1Risk-BasedRatioZone1. Well capitalized 6.5% or
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Description: (1)CommonEquity Tier 1Risk-BasedRatioZone1. Well capitalized 6.5% or above and 8% orabove2. Adequatelycapitalized3. Undercapitalized4. Significantly45% or above and 6% oraboveUnder 4.5%undercapitalized Under 3%Under 6%or Under 6%5. Criticallyunderca

CET 1 capital ratio = CET 1/risk-weighted assets= ($50 million/ $2,017.6)*100= 2.48% The bank's CET…

Business

Economics

Common Equity Tier 1 Risk-Based Ratio Zone 1. Well capitalized 6.5% or above and 8% or above 2. Adequately capitalized (2) 3. Undercapitalized Under 4.5% 4. Significantly undercapitalized Under 3% 45% or above and 6% or above Under 6% or Under 6% 5. Critically undercapitalized Tangible equity/Total assets 52% or Tier I Risk-Based Ratio (3) Total Risk-Based Ratio and 10% or above of and 8% or above and 4% or above Under 8% or Under 8% Tier 1 Leverage Ratio and 5% or above (4) or of Under 4% Under 4% Capital Directive/Other and Not subject to a capital directive to meet a specific level for any capital measure and Does not meet the definition of well capitalized A bank has CET 1 capital of $50 million, Tier I capital of $90 million and Tier II capital of $70 million. The bank has risk-weighted assets of $2.017.6 million. Ba apital ratio, this bank is: significantly undercapitalized. undercapitalized. well capitalized. adequately capitalized.

Common Equity Tier 1 Risk-Based Ratio Zone 1. Well capitalized 6.5% or above and 8% or above 2. Adequately capitalized (2) 3. Undercapitalized Under 4.5% 4. Significantly undercapitalized Under 3% 45% or above and 6% or above Under 6% or Under 6% 5. Critically undercapitalized Tangible equity/Total assets 52% or Tier I Risk-Based Ratio (3) Total Risk-Based Ratio and 10% or above of and 8% or above and 4% or above Under 8% or Under 8% Tier 1 Leverage Ratio and 5% or above (4) or of Under 4% Under 4% Capital Directive/Other and Not subject to a capital directive to meet a specific level for any capital measure and Does not meet the definition of well capitalized A bank has CET 1 capital of $50 million, Tier I capital of $90 million and Tier II capital of $70 million. The bank has risk-weighted assets of $2.017.6 million. Ba apital ratio, this bank is: significantly undercapitalized. undercapitalized. well capitalized. adequately capitalized.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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