The Bank Is Considering Changing Its Asset Mix by Moving

question 131

Multiple Choice

The bank is considering changing its asset mix by moving $100 million of commercial loans into Treasury securities.If it does change the asset mix and capital remains the same, the risk-based capital ratio

• A)will not change because the total assets have not changed.
• B)will decrease because the earnings rate on Treasuries is less than on loans.
• C)will increase by 16.67 percent.
• D)will increase because the assets will have less risk.
• E)will change, but the direction cannot be determined with the information given.

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Definitions:

Tachycardia

A condition characterized by an abnormally fast heart rate, often defined as exceeding 100 beats per minute in adults.

Heart Rate

The number of heartbeats per unit of time, typically expressed in beats per minute (bpm), indicating cardiovascular fitness and health.

Telemetry Unit

A hospital section dedicated to the monitoring of patients' vital signs and cardiac status remotely using specialized technology.

Digoxin

A medication primarily used to treat heart conditions, including atrial fibrillation and heart failure.