1. Third Fifth Bank has the following balance sheet (in millions), with the risk weights in parentheses....

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1. Third Fifth Bank has the following balance sheet (in millions), with the risk weights in parentheses.

Assets Liabilities and Equity Cash (0%) $ 20 Deposits $130 Mortgage loans (50%) 50 Subordinated debt (>5 years) 5 Consumer loans (100%) 70 Equity 5 Total assets $140 Total liabilities and equity $140 In addition, the bank has $20 million in commercial standby letters of credit to a BB-rated corporation and $40 million in 10-year FX forward contracts that are in the money by $1 million.

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