Question
A bank has $250 million in assets in the 0 percent risk-weight category.It has $475 million in assets in the 20 percent risk-weight category.It has
A bank has $250 million in assets in the 0 percent risk-weight category.It has $475 million in assets in the 20 percent risk-weight category.It has $1250 million in assets in the 50 percent risk-weight category; has $1500 million in assets in the 100 percent risk-weight category; and $325 in the 150 percent risk weight category.This bank has $76 million in Tier 1 capital and $28 million in Tier 2 capital.What is this bank's ratio of total capital to risk assets? The regulatory minimum total risk-based capital ratio is below 8%. Is the bank in compliance with the regulatory minimum requirement?If no, what must the bank do to raise its risk-based capital ratio?
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