Question
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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Financial Management
Authors: Rajiv Srivastava, Anil Misra
2nd Edition
0198072074, 9780198072072
