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1. Determine and write-down in the space provided for each of the following whether the capital item is considered as part of Tier 1 or
1. Determine and write-down in the space provided for each of the following whether the capital item is considered as part of Tier 1 or Tier 2 capital. Note: Problem # 3 and # 4 are not related (4 points) ($ millions) Tier 1 or Tier 2 $10 40 10 Common stock (par value) Undivided profits Cumulative perpetual preferred stock with unpaid dividends Surplus Equity reserves Subordinated debt capital instruments 50 20 10 (b) Calculate the maximum RWA amount (in millions) that the bank would maintain to meet the mi Tier 1 risk-based capital ratio requirements. (3 points) (c) Calculate the maximum RWA amount that the bank would maintain to meet the minimum total risk-based capital ratio requirements. (3 points)
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