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The assets of a bank consist of $10 million of corporate loans, $15 million of OECD commercial banks, and $20 million of residential mortgages. Given
The assets of a bank consist of $10 million of corporate loans, $15 million of OECD commercial banks, and $20 million of residential mortgages. Given the weights of the on-balance-sheet, what is the risk-weighted amount (RWA)? What is the required capital of the bank, assuming the bank has only on-balance items?
Risk Weight (%) Asset Category 0 Cash, gold bullion, claims on OECD governments such as Treasury bonds or insured residential mortgages 20 Claims on OECD banks and OECD public sector entities such as securities issued by U.S. government agencies or claims on municipalities 50 Uninsured residential mortgage loans 100 All other claims such as corporate bonds and less developed country debt, claims on non-OECD banksStep by Step Solution
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