Question No. 5: Using the following information for New River National Bank, calculate that bank's ratios of Tier I-capital-to- risk-weighted assets and total -capital-to-risk-weighted assets under the terms of the Basel I agreement. Does the bank have sufficient capital? 1. On-balance-sheet items (Assets) Amounts S Loans to corporations U.S. treasury securities Deposits due from banks Secured loans Cash Off-balance-sheet items Amounts $ 150,000 Long-term unused commitments 170,000 70,000 SLCS 60,000 Total off-balance-sheet item 140,000 Tier I capital 20,000 Tier II capital 160,000 350,000 11,000 10,000

1. Project Eastcoast Sdn. Bhd. is planning to buy an insurance plan to minimise the risk of losses. The insurance options are as below: Plan North i. South ii. West Project Eastcost Sdn. Bhd. historical losses incurred as below: Insurance Policy An insurance policy that provides RM5,000 of straight deductible attached to it with an annual policy limit of RM22,000. An insurance policy that provides RM22,000 of aggregate deductible attached to it with a coinsurance of 5 percent. Month of claim January April May August November December An insurance policy that required 15 percent coinsurance attached to it with no policy limit. Probability of losses 0.76 0.92 0.37 0.55 0.83 0.44 As a risk management consultant, you are required to advise Project Eastcoast Sdn. Bhd. on the preferable insurance plan. Amount of Possible Loss (RM) 8,200 6,500 10,500 9,600 1,700 5,800 Determine the amount retained by Project Eastcoast Sdn. Bhd. and the amount paid by insurer for Plan North, Plan South and…

3 Jeremy has $2300 to invest for 6 years. a) Which is the better investment? Justify your answer. Investment A: Guaranteed Investment Certificate (GIC) that earns 6.8% compounded semi-annually Investment B: bond that earns 6.7% compounded monthly

4. The available interest rate on a $290,000 mortgage is 8%. Determine the monthly payments for both 20-year and 30-year loans, and determine the total amount repaid in each case.