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ArbitrLikvidat [17]
3 years ago
5

Suppose that a bank has $30 million in asset X, $10 million in asset Y, and $20 million in asset Z. Each asset has a different r

isk weight. The risk weight for asset X is 30%, the risk weight for asset Y is 60%, and the risk weight for asset Z is 10%. The amount of risk-weighted assets for this bank is ____________ million. Assuming that the bank has to hold capital equal to 8% of its risk-weighted assets, the bank must hold _____________ million in capital.
Business
1 answer:
tia_tia [17]3 years ago
6 0

Answer:

The amount of risk-weighted assets for this bank is <u>$17 million</u>. Assuming that the bank has to hold capital equal to 8% of its risk-weighted assets, the bank must hold <u>$1.36 million</u> in capital.

Explanation:

asset X, $30 million x 30% risk = $9 million weighted risk

asset Y, $10 million x 60% risk = $6 million weighted risk

asset Z, $20 million x 10% risk = $2 million weighted risk

total risk weighted assets = $9 million + $6 million + $2 million = $17 million

since the bank has to 8% capital to risk weighted assets = $17 million x 8% = $1.36 million

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