Let\'s assume that you have been asked to calculate risk-based capital ratios fr

Question

Let's assume that you have been asked to calculate risk-based capital ratios fro a bank with the following accounts: Cash =5million Government Securities = 7 million Mortgage Loan =30 million Other loan = 50 million Fixed assets = 10 million Intangible assets = 4 million Loan-loss reserves = 5 million Owners' equity = 5 million Trust-preferred securities = 3 million Cash assets and government securities are not considered risky. Loans secured by real estate have a 50 percent weighting factor. All other loans have a 100 percent weighting factor in terms of riskiness. A. Calculate the equity capital ratio B. Calculate the Tier 1 Ratio using risk-adjusting assets C. Calculate the Total Capital (Tier 1 plus Tier 2) Ratio Using risk-adjusted assets.

Explanation / Answer

Risk-based capital ratios is calculated by dividing the company

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.