Suppose That a Bank Has $30 Million in Asset X,$10

question 71

Multiple Choice

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 risk 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.

• A)$17;$13,6
• B)$60;$4.8
• C)$17;$1.36
• D)$66;$5.28

---

Definitions:

Capital Accounts

Represent the amount of money the owners have invested in a business, plus any profits or minus any losses.

Original Partners

The initial individuals or entities that form a partnership agreement to create and manage a business.

Bonuses

Additional compensations paid to employees as a reward for their performance and contributions to the company's success, beyond their regular salary.

Old Partnership

A previously established business arrangement where two or more individuals agree to share the profits and losses of a business venture.