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
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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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