Calculate bank’s ratio of Tier 1 capital to risk-weighted-assets and total capital to risk-weighted-assets under the terms of Basel 1 Agreement by using the following information. On Balance Sheet Items (Assets) Amount $ Cash 4,000,000 U.S Treasury securities 30,600,000 Deposit balances due from other banks 4,000,000 Loans secured by first liens on residential property (1-4 family dwellings) 66,000,000 Loans to corporations 105,300,000 Off Balance Sheet Items Standby letters of credit backing municipal bond 20,500,000 Long term unused loan commitments to corporate customers 25,500,000 Tier 1 capital 7,500,000 Tier 2 capital 5,800,000
Calculate bank’s ratio of Tier 1 capital to risk-weighted-assets and total capital to risk-weighted-assets under the terms of Basel 1 Agreement by using the following information. On Balance Sheet Items (Assets) Amount $ Cash 4,000,000 U.S Treasury securities 30,600,000 Deposit balances due from other banks 4,000,000 Loans secured by first liens on residential property (1-4 family dwellings) 66,000,000 Loans to corporations 105,300,000 Off Balance Sheet Items Standby letters of credit backing municipal bond 20,500,000 Long term unused loan commitments to corporate customers 25,500,000 Tier 1 capital 7,500,000 Tier 2 capital 5,800,000
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Calculate bank’s ratio of Tier 1 capital to risk-weighted-assets and total capital to risk-weighted-assets under the terms of Basel 1 Agreement by using the following information.
|
On Balance Sheet Items (Assets) |
Amount $ |
|
Cash |
4,000,000 |
|
U.S Treasury securities |
30,600,000 |
|
Deposit balances due from other banks |
4,000,000 |
|
Loans secured by first liens on residential property (1-4 family dwellings) |
66,000,000 |
|
Loans to corporations |
105,300,000 |
|
|
|
|
Off Balance Sheet Items |
|
|
Standby letters of credit backing municipal bond |
20,500,000 |
|
Long term unused loan commitments to corporate customers |
25,500,000 |
|
Tier 1 capital |
7,500,000 |
|
Tier 2 capital |
5,800,000 |
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