2. How do regulatory capital requirements affect bank operating policies? Table 1 Common Stock Perpetual preferred Stock Surplus Undivided Profits Capital reserves Reserve for loan and lease losses notes and Subordinated debentures In thousands $ 45,000 5,000 2,000 160,000 6,000 4,000 2,000 (5 Marks) 3. Given the following information in Table 1 above, calculate: a. If risk-adjusted assets equal $2,000,000, is tier one and total capital adequate? (8 Marks) b. If an analysis of market risk revealed that the bank's value-at-risk (VAR) equals $250,000, and its adjusted value of credit-risk-weighted assets equals $1,750,000, is capital still adequate? (8 Marks)

2. How do regulatory capital requirements affect bank operating policies? (5 Marks) Table 1 3. Given the following information in Table 1 above, calculate: a. If risk-adjusted assets equal $2,000,000, is tier one and total capital adequate? (8 Marks) b. If an analysis of market risk reyealed that the bank's value-at-risk (VAR) equals $250,000, and its adjusted value of eredit-risk-weighted assets equals $1,750,000, is capital still adequate? (8 Marks)