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Question VII: Regulatory Taxes (15 Points / 5 points each) An FI is planning to issue $100 million in BB-rated commercial loans. The FI will

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Question VII: Regulatory Taxes (15 Points / 5 points each) An FI is planning to issue $100 million in BB-rated commercial loans. The FI will finance the loans by issuing demand deposits a. How much capital must it raise if the minimum capital ratio for the bank is 8% and the risk-weight of comme r cial loans is 100%? b. What is the minimum amount of demand deposits needed to fund the loan. Assume that reserve requirements at 10%. c. Show the bank' s balance sheet if this loan is the only project that it funds

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