QUESTION 17

The bank's provisions for bad and doubtful debt amount to $20 million. The bank writes off $18 million non-performing loans.

As a result of the write off, the gross loans ___________________, the net loans _____________________ and bank's equity _______________.

	A.	decreases by $20 million; decreases by $18 million; decreases by $2 million.
	B.	does not change; decreases by $2 million; decreases by $2 million.
	C.	decreases by $18 million; does not change; does not change.
	D.	decreases by $18 million; decreases by $18 million; does not change.
	E.	decreases by $18 million; increases by $18 million; does not change

QUESTION 18

Bank A has a RWA of $5,000,000. Calculate its Basel III requirement for Tier 1 capital in order to avoid restrictions by the regulator on its future assets' growth.

Express your result in $000. You must not type $ sign or comas. You must round your result to ONE decimal when your answer is expressed in $000. If your result is $10,530 you will be required to type 10.5.

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