Under Basel I, the Credit Equivalent Amount (CEA) for each derivative without netting is calculated as: $CEA = \max(V, 0) + a \times L$ where $V$ is the current market value, $a$ is the add-on factor, and $L$ is the notional principal.

For transaction (a): 7-year interest rate swap $V = -3$ million (so $\max(V, 0) = 0$) $a = 1.5\%$ (Remaining maturity > 5 years, Interest Rate) $L = 400$ million $CEA_a = 0 + 0.015 \times 400 = 6.0$ million

For transaction (b): 3-year interest rate swap $V = 7$ million $a = 0.5\%$ (Remaining maturity 1 to 5 years, Interest Rate) $L = 170$ million $CEA_b = 7 + 0.005 \times 170 = 7 + 0.85 = 7.85$ million

For transaction (c): 4-month commodity derivative $V = 4$ million $a = 10.0\%$ (Remaining maturity < 1 year, Other Commodities) $L = 80$ million $CEA_c = 4 + 0.10 \times 80 = 4 + 8.0 = 12.0$ million

Total CEA = $6.0 + 7.85 + 12.0 = 25.85$ million

Risk-Weighted Assets (RWA) = Total CEA $\times$ risk weight = $25.85 \times 0.5 = 12.925$ million

Capital Requirement = RWA $\times 8\% = 12.925 \times 0.08 = 1.034$ million