Review Problem Set-Chap 12-HW#4-SOLUTIONS.pdf - FIN 4243 \u2013 Commercial Bank Management Review Problems Chapter 12 Homework 4 Solutions Use the

Review Problem Set-Chap 12-HW#4-SOLUTIONS.pdf - FIN 4243...

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FIN 4243 Commercial Bank Management Review Problems: Chapter 12 & Homework 4 Solutions Use the following information to answer questions 1 - 6. 1.How much Tier 1 capital does the bank have? 2.What is the minimum leverage capital for this bank? 3.What is the amount of risk-adjusted assets for the bank? ANSWER: See table below: Risk Weight Risk-Adjusted Assets Cash and Treasury Securities 2,000 $ 0% - $ Repurchase Agreements 1,000 $ 20% 200 $ Municipal Bonds 1,500 $ 20% 300 $ Single Family Home Mortgages 2,700 $ 50% 1,350 $ CMOs 2,500 $ 50% 1,250 $ Commercial Loans 1,500 $ 100% 1,500 $ Agricultural Loans 2,100 $ 100% 2,100 $ Allowance for Loan Loss (300) $ 0% - $ Bank Buildings 2,000 $ 100% 2,000 $ Total 15,000 $ 8,700 $ Bank Assets 4.What is the minimum Tier 1 capital this bank needs to have?
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