The Bank of Kampala has a credit portfolio of R$7$ bn$,$ with an average portfolio probability

of default $($PD$)$ of $1\mathrm{.}3\%.$ Net income or margin is $2\mathrm{.}6\%.$ If the portfolio collapses, about

$45\%$ of recovery can happen. Therefore, the maximum loss would be R$3\mathrm{.}85$ bn $(55\%$ x

$7$ bn$).$ Hence, the outcome shows a gain of roughly R$182$ m versus a loss of R$3\mathrm{.}85$ bn$.$

The Bank of Kampala maintains $9\%$ capital adequacy ratio and the portfolio exposure

$($RWA$)$ is R$7$ bn$.$ Based on the Kelly criterion, what is the capital buffer that should be

maintained by The Bank of Kampala as percentage $(\%)$ of RWA?