
Explanation:
Risk weighted assets should be calculated as follows:
$600\text{m} \times 50%$$400\text{m} \times 100%$$500\text{m} \times 0%$$200\text{m} \times 0%$$700\text{m}$Ultimate access to all questions.
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Q.2334 In 1992, Germany was under Basel I regulations. Eintracht Bank from Frankfurt has had the following portfolio structure (in Deutsche Marks (DM)):
Risk weights were as follows:
| Risk Weight (%) | Asset category |
|---|---|
| 0 | Cash, gold bullion, claims on OECD governments such as Treasury bonds or insured residential mortgages |
| 20 | Claims on OECD banks and OECD public sector entities such as securities issued by U.S. government agencies or claims on municipalities |
| 50 | Uninsured residential mortgage loans |
| 100 | All other claims such as corporate bonds and less-developed country debt, claims on non-OECD banks |
The risk-weighted assets of Eintracht bank were closest to which of the following?
A
700 million
B
1 billion
C
500 million
D
1.2 billion