f. ABC Bank has the following balance sheet (in millions) and has no off-balance-sheet exposure. Assets Liabilities and Equity Cash $20 Deposits $960 Treasury bills 40 Subordinated debt 25 Residential mortgages Common stock 45 Business loans 430 Retained earnings 40 Total assets $1,090 Total liabilities and equity $1,090 Total Risk Weighted Assets are $730. i) What is the Tier 1 risk-based capital ratio? ii) What is the Capital Adequacy Ratio (CAR)? iii) What is the Tier 1 leverage ratio?
f. ABC Bank has the following balance sheet (in millions) and has no off-balance-sheet exposure. Assets Liabilities and Equity Cash $20 Deposits $960 Treasury bills 40 Subordinated debt 25 Residential mortgages Common stock 45 Business loans 430 Retained earnings 40 Total assets $1,090 Total liabilities and equity $1,090 Total Risk Weighted Assets are $730. i) What is the Tier 1 risk-based capital ratio? ii) What is the Capital Adequacy Ratio (CAR)? iii) What is the Tier 1 leverage ratio?
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
Related questions
Question
![f.
ABC Bank has the following balance sheet (in millions) and has no off-balance-sheet exposure.
Assets
Liabilities and Equity
Cash
$20
Deposits
$960
Treasury bills
40
Subordinated debt
25
Residential mortgages
Common stock
45
Business loans
430
Retained earnings
40
Total assets
$1,090
Total liabilities and equity
$1.090
Total Risk Weighted Assets are $730.
i)
What is the Tier 1 risk-based capital ratio?
ii)
What is the Capital Adequacy Ratio (CAR)?
iii)
What is the Tier 1 leverage ratio?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcb287f3b-e750-43d0-8884-53a8ea5b78a9%2F8fe032e9-cf77-4794-94a0-12c04beae2df%2Fpiali2_processed.png&w=3840&q=75)
Transcribed Image Text:f.
ABC Bank has the following balance sheet (in millions) and has no off-balance-sheet exposure.
Assets
Liabilities and Equity
Cash
$20
Deposits
$960
Treasury bills
40
Subordinated debt
25
Residential mortgages
Common stock
45
Business loans
430
Retained earnings
40
Total assets
$1,090
Total liabilities and equity
$1.090
Total Risk Weighted Assets are $730.
i)
What is the Tier 1 risk-based capital ratio?
ii)
What is the Capital Adequacy Ratio (CAR)?
iii)
What is the Tier 1 leverage ratio?
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