Under the capital adequacy requirement for banks,in order to fund a $100 000 loan for a multinational corporate client with a Standard & Poor's rating of AA,a bank will:

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The capital adequacy requirement for banks includes assigning a risk-weighting to loans based on the creditworthiness of the borrower. The AA rating of the multinational corporate client suggests a low-risk borrower, which is assigned a risk-weighting of 20%. Therefore, the bank will need to allocate capital equivalent to 20% of the loan amount to comply with the capital adequacy requirement.

Under the Capital Adequacy Requirement for Banks,in Order to Fund