Ques15:

Bondi Bank has the following balance sheet (in millions of dollars):

Assets	$	Liquidity Level	Liabilities and Equity	$	Run-off Factor (%)
Cash	20	Level 1	Stable retail deposits	80	3
Corporate Bonds (rated AA)	30	Level 2A	Less stable retail deposits	40	10
Residential mortgage-backed securities	50	Level 2B	Unsecured wholesale funding	60	100
Residential mortgage loans	100		Equity	20
Total	200			200

Assume that a 15% haircut applies to Level 2A assets and a 50% haircut applies to level 2B assets. Assume further that the amount of Level 2 assets in the stock of High Quality Liquid Assets (HQLAs) is capped at of the amount of Level 1 assets. Cash inflows over the next 30 days from the banks performing assets are $10 million.

What is Kensington Banks Liquidity Coverage Ratio (LCR)?

Select one:

a. 24%

b. 125%

c. 130%

d. 59%

e. 106%