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  3. 4 suppose that a bank has the following balance sheet...

Question: 4 suppose that a bank has the following balance sheet...

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4. Suppose that a bank has the following balance sheet (market values, USD billions) Assets Liabilities Cash o 50 Deposits 870 Corporate loans (oox 650 Long-term debt Secured mortgage 200 loans T-bills, 20.0, 50 Common stock 25 (a) What is the value of the banks risk-weighted assets? What is the banks Tier 1 capital? What is the banks total regulatory capital? (6 marks) (b) Does the bank satisfy the capital ratios imposed by the BaselI accord? (4 marks) (e) Can the bank fulil its capital requirement by selling some of its corporate loans? Explain your answer quantitatively. (5 marks) PLEASE TURN VER
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