Question
(a)Your Bank has the following balance sheet (in millions of dollars) and has no off-balance-sheet or securitisation activities. Assets Liabilities and equity Cash (0%) $30
(a)Your Bank has the following balance sheet (in millions of dollars) and has no off-balance-sheet or securitisation activities.
Assets
Liabilities and equity
Cash (0%)
$30
Deposits
$1200
Australian Treasury Bonds (0%)
50
Subordinated debt
50
Insured standard residential mortgages with LVR of 84% (50%)
700
Common Equity
50
Other loans rated BB+ (100%)
530
Retained earnings
10
Total assets
$1310
Total liabilities and equity
$1310
(i)What are the values of the regulated primary capital measures?
(ii)What is the value of credit risk weighted assets?
(iii)Assuming that operational risk and market risk are zero, calculate any two of the capital adequacy ratios?
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Principles of Finance
Authors: Scott Besley, Eugene F. Brigham
5th edition
1111527369, 978-1111527365
