Sigma Bank Has the Following Balance Sheet in Millions of Dollars.Unless

question 39

Multiple Choice

Sigma Bank has the following balance sheet in millions of dollars.Unless mentioned otherwise, all assets are associated with corporate customers (not governments or sovereigns) .Values are in millions of dollars.Refer to table 20-8 for appropriate risk weights. $$\begin{array} { | l | r | l | r | } \hline \text { Cash } & \$ 40 & \text { Deposits } & \$ 370 \\\hline \begin{array} { l } \text { Municipal General } \\\text { Obligation Bonds }\end{array} & \$ 60 & & \\\hline \begin{array} { l } \text { Residential Mortgages } \\\text { 1-4 family } \\\left( 80 \% { - 90\% } \text { LTV } \right) \end{array} & \$ 100 & \begin{array} { l } \text { Perpetual Preferred } \\\text { Stock }\end{array} & \$ 20 \\\hline \begin{array} { l } \text { Commercial loans } \\\text { BB + rated }\end{array} & \$ 200 & \text { Equity } & \$10\\\hline \text { Total Assets } & \$ 400 & & \$ 400 \\\hline\end{array}$$ Off balance sheet contingent liabilities (Refer to Table 20-10) $40 million direct-credit substitute standby letters of credit issued to a U.S.corporation.
$40 million commercial letters of credit issued to a corporation
Off-balance sheet derivatives (Refer to Table 20-11)
$200 million 10-year interest rate swaps
$100 million 2-year forward DM contracts
What is the minimum required Tier I and Total risk-based capital for the on-balance-sheet assets in order for the DI to be adequately capitalized?

• A)$8 million; $8 million.
• B)$16.87 million; $16.87 million.
• C)$17.22 million; $22.96 million.
• D)$22.96 million; $28.70 million.
• E)$10.8 million; $8 million.

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Definitions:

Scala Vestibuli

Division of the cochlea lying above the spiral lamina and vestibular membrane.

Helicotrema

Opening at the apex of the cochlea through which the scala vestibuli and the scala tympani of the cochlea connect.

Bony Labyrinth

A complex system of channels and cavities within the temporal bone of the skull, housing the organs of hearing and balance in the inner ear.

Attenuation Reflex

The reflex mechanism that protects the inner ear from damage by reducing the transmission of sound, particularly for loud sounds, through the contraction of muscles around the ossicles.