Suppose that a bank has $500 million in asset X,$400 million in asset Y,and $200 million in asset Z.Each asset has a different risk weight.The risk weight for asset X is 40%,the risk weight for asset Y is 70%,and asset Z has zero risk.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.

Question

Quizplus · Accepted Answer

The risk-weighted assets are calculated as follows: (500 * 0.4) + (400 * 0.7) + (200 * 0) = 200 + 280 + 0 = $480 million. The capital required is 8% of $480 million, which is $38.4 million.

Suppose That a Bank Has $500 Million in Asset X,$400