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.
A) $480; $38.4
B) $1,100; $88
C) $1,100; $880
D) $340; $27.2
A
Economics
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