LABOR ECONOMICS (LL+ACCESS)
8th Edition
ISBN: 9781264909339
Author: BORJAS
Publisher: MCG
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Question
Chapter 11, Problem 11P
(a)
To determine
Determine how the offering of stock options to CEOs attempts to align CEO incentives with the shareholder incentive.
(b)
To determine
Explain the given statement.
(c)
To determine
Explain the given statement.
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(1)
Common
Equity Tier 1
Risk-Based
Ratio
Zone
1. Well capitalized 6.5% or above and 8% or
above
2. Adequately
capitalized
3. Undercapitalized
4. Significantly
45% or above and 6% or
above
Under 4.5%
undercapitalized Under 3%
Under 6%
or Under 6%
5. Critically
undercapitalized Tangible equity/Total assets 52%
(2)
Tier I
Risk-Based
Ratin
or
undercapitalized.
well capitalized.
adequately capitalized.
6
Total
Risk-Based
Ratio
and 10% or
above
of
and 8% or above and 4% or
above
Under 8%
and 5% or
above
Tier1
Leverage
Ratio
or
or Under 8% of
Under 4%
Under 4%
Capital Directive/Other
and Not subject to a capital
directive to meet a specific
level for any capital
measure
and Does not meet the
definition of well
capitalized
A bank has CET 1 capital of $50 million, Tier I capital of $90 million and Tier II capital of $70 million. The bank has risk-weighted assets of $2,017.6 million. Ba
capital ratio, this bank is:
significantly undercapitalized.
Chapter 11 Solutions
LABOR ECONOMICS (LL+ACCESS)
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