Explanation:

Capital adequacy ratio = $\frac{\text{Tier I capital + Tier II capital}}{\text{Risk weighted assets}}$

Bank A has risk-weighted assets of $65 million ($50 million × 0.3 + $100 million × 0.50).
It also has capital of $300 million, ($200 million + $100 million).

Its resulting capital adequacy ratio is 4.61 ( $\frac{\`$ 300 \text{ million}}{\ $65` \text{ million}}$ ).

Q.3102 Bank A has `$200` million in tier 1 capital and `$100` million in tier 2 capital. Bank A loaned `$50` million to XYZ Corporation, which has 30% riskiness, and `$100` million to Brighter World, Inc., which has 50% riskiness. The bank’s capital adequacy ratio is equal to:

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Last updated: July 5, 2026 at 07:21

3.52

1.51

2.2

4.61

Financial Risk Manager Part 2

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Q.3102 Bank A has `$200` million in tier 1 capital and `$100` million in tier 2 capital. Bank A loaned `$50` million to XYZ Corporation, which has 30% riskiness, and `$100` million to Brighter World, Inc., which has 50% riskiness. The bank’s capital adequacy ratio is equal to:

Financial Risk Manager Part 2

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Get started today

Comments (0)

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Q.3102 Bank A has $200 million in tier 1 capital and $100 million in tier 2 capital. Bank A loaned $50 million to XYZ Corporation, which has 30% riskiness, and $100 million to Brighter World, Inc., which has 50% riskiness. The bank’s capital adequacy ratio is equal to:

Q.3102 Bank A has `$200` million in tier 1 capital and `$100` million in tier 2 capital. Bank A loaned `$50` million to XYZ Corporation, which has 30% riskiness, and `$100` million to Brighter World, Inc., which has 50% riskiness. The bank’s capital adequacy ratio is equal to: