What is the contribution to the asset base of the following items under the Basel III requirements? $10 million cash reserves. $50 million 91-day U.S. Treasury bills. $25 million cash items in the process of collection. $5 million UK government bonds, OECD CRD rated 1. $5 million French short-term government bonds, OECD CRD rated 2. $1 million general obligation bonds. $40 million repurchase agreements (against U.S. Treasuries). $2 million loan to foreign bank, OECD rated 3. $500 million 1–4 family home mortgages, category 1, loan-to-value ratio 80 percent. $10 million 1–4 family home mortgages, category 2, loan-to-value ratio 95 percent. $5 million 1–4 family home mortgages, 100 days past due. $500 million commercial and industrial loans, AAA rated. $500 million commercial and industrial loans, B- rated. $100,000 performance-related standby letters of credit to a AAA rated corporation. $100,000 performance-related standby letters of credit to a municipality issuing general obligation bonds. $7 million commercial letter of credit to a foreign bank, OECD CRC rated 2. $3 million five-year loan commitment to a foreign government, OECD CRC rated 1. $8 million bankers’ acceptance conveyed to a U.S. AA rated corporation. $17 million three-year loan commitment to a private agent. $17 million three-month loan commitment to a private agent. $30 million standby letter of credit to back an A rated corporate issue of commercial paper. $4 million five-year interest rate swap with no current exposure. $6 million two-year currency swap with $500,000 current exposure.

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter7: International Arbitrage And Interest Rate Parity

Section: Chapter Questions

Problem 19QA

See similar textbooks

Related questions

Question

What is the contribution to the asset base of the following items under the Basel III requirements?
1. $10 million cash reserves.
2. $50 million 91-day U.S. Treasury bills.
3. $25 million cash items in the process of collection.
4. $5 million UK government bonds, OECD CRD rated 1.
5. $5 million French short-term government bonds, OECD CRD rated 2.
6. $1 million general obligation bonds.
7. $40 million repurchase agreements (against U.S. Treasuries).
8. $2 million loan to foreign bank, OECD rated 3.
9. $500 million 1–4 family home mortgages, category 1, loan-to-value ratio 80 percent.
10. $10 million 1–4 family home mortgages, category 2, loan-to-value ratio 95 percent.
11. $5 million 1–4 family home mortgages, 100 days past due.
12. $500 million commercial and industrial loans, AAA rated.
13. $500 million commercial and industrial loans, B- rated.
14. $100,000 performance-related standby letters of credit to a AAA rated corporation.
15. $100,000 performance-related standby letters of credit to a municipality issuing general obligation bonds.
16. $7 million commercial letter of credit to a foreign bank, OECD CRC rated 2.
17. $3 million five-year loan commitment to a foreign government, OECD CRC rated 1.
18. $8 million bankers’ acceptance conveyed to a U.S. AA rated corporation.
19. $17 million three-year loan commitment to a private agent.
20. $17 million three-month loan commitment to a private agent.
21. $30 million standby letter of credit to back an A rated corporate issue of commercial paper.
22. $4 million five-year interest rate swap with no current exposure.
23. $6 million two-year currency swap with $500,000 current exposure.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Accounting for Foreign Exchange Transactions

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.