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2. Suppose the bank in Table 10 loses $10 in loans. Calculate the new risk weighted capital ratio. Use weights of 0.94 for risky assets

2. Suppose the bank in Table 10 loses $10 in loans. Calculate the new risk weighted capital ratio. Use weights of 0.94 for risky assets and zero for risk free assets.

Asset Liabilities
reserves 10 deposits 40
real estate loans 30 borrowing 70
treasury sercurities 20
commerical loans 65

A. 4.00% B. 4.95% C. 6.26% D. 5.26%

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