Note: the Residential Mortgages All Have a Loan-To-Value of Between

question 36

Multiple Choice

$\begin{array}{lccc} \text {Cash and Treasury securities}& \text { \$ 100 million}\\ \text { FedFunds Sold }& \text { \$ 100 million}\\ \text { Resiclential Mortgages 1-4 family}& \text { \$ 200 million}\\ \text {Commercial Loans }& \text { \$ 600 million}\\\end{array}$
Note: The residential mortgages all have a loan-to-value of between 60 and 80 percent.
If the bank has capital of $50 million,what is the leverage ratio using the standardized approach?

• A)5.00 percent.
• B)8.33 percent.
• C)25.0 percent.
• D)50.0 percent.

---

Definitions:

Cash Crops

Agricultural products grown primarily for sale to generate revenue rather than for personal use or sustenance.

Material Possessions

Items of physical property owned by individuals or groups, including things like homes, cars, and personal belongings.

New England Colonies

The early British colonies in the northeastern region of what became the United States, including Massachusetts, Connecticut, Rhode Island, and New Hampshire.

Chesapeake Colonies

The British colonies established in the Chesapeake Bay region, primarily Virginia and Maryland, known for their tobacco-based plantation economy.