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Exercise 2: A financial institution has the following balance sheet Amount 150 Asset Cash Treasury bills Commercial loans Amount 50 50 150 50 Liabilities Demand

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Exercise 2: A financial institution has the following balance sheet Amount 150 Asset Cash Treasury bills Commercial loans Amount 50 50 150 50 Liabilities Demand deposits Certificates of deposits 100 Convertible bonds Common stock 40 60 Residential mortgage (60% to 80%) a) Calculate the credit-risk adjusted on-balance sheet assets (CRABA) b) Calculate the 'Common Equity Tier 1', 'Tier I capital', and Tier II capital. c) Calculate the 'Common equity Tier I risk-based capital ratio', Tier I risk-based capital ratio', and 'Total risk-based capital ratio

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