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The following table is the balance sheet for Bank A: Assets Risk weight factors Risk adjusted assets Cash 120 0% U.S. Treasury Securities 240 0%

The following table is the balance sheet for Bank A:

Assets

Risk weight factors

Risk adjusted assets

Cash

120

0%

U.S. Treasury Securities

240

0%

Bank reserves

60

0%

U.S. government agency securities

20

20%

Mortgage loans

350

50%

Consumer loans

150

100%

Construction loans

10

100%

Corporate debt securities

50

100%

Total

1000

Liabilities and Equity

Transaction deposits

700

Saving accounts

100

Negotiated CDs

50

Repos

70

Subordinated debt

20

Liabilities

940

Common equity

30

Retained earnings

15

Preferred stocks

15

Equity

60

(1) Calculate Common Equity Tier 1 capital. (0.5 point)

(2) Calculate Additional Tier 1 capital. (0.5 point)

(3) Calculate Tier II capital. (0.5 point)

(4) Calculate the credit risk-adjusted assets using the risk weight factors. (0.5 point)

(5) Calculate the total capital. (0.5 point)

(6) Calculate CET1/ Credit risk adjusted assets

Tier I / Credit risk adjusted assets

Total capital / Credit risk adjusted assets

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