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Risk Weights Assets Cash Cash FFsold R/Ps U.S Treasuries Muni (genl obl) Muni (rev) Assets 90 105 88 20% Risk Weights 100% 1

What is the total of risk weighted assets?

What is the bank's capital adequacy ratio?

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Answer #1

Total of Risk Weighted Assets = 332

Assets Risk Weights Risk-Weighted Assets
Cash 2 0% 0
FF Sold 3 20% 0.6
R/Ps 2 20% 0.4
US Treasuries 6 0% 0
Muni (Gen'l Obl) 45 20% 9
Muni (Rev) 18 50% 9
Consumer Loan 90 100% 90
Commercial Re Loans 105 100% 105
C&I Loans 88 100% 88
Leveraged Loans 20 150% 30
Risk-Weighted Assets 332

Capital Adequacy Ratio  = (Tier 1 Capital + Tier 2 Capital) / Risk-Weighted Assets =

40 / 332 = .1205= 12.05%

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