Question: 3) Determine and write down in the space provided for each of the following whether the capital item is considered as part of Tier 1
3) Determine and write down in the space provided for each of the following whether the capital item is considered as part of Tier 1 or Tier 2 capital. Note: Problem # 3 and # 4 are not related. (5 points) ($ millions) Tier 1 or Tier 2 Equity reserves Undivided profits Equity commitment notes Surplus Subordinated debt capital instruments Minority interest in the equity accounts of consolidated subsidiaries $25 30 10 60 5 5 (b) Calculate the maximum RWA amount (in millions) that the bank would maintain to meet the minimum Tier 1 risk-based capital ratio requirements. (5 points) (c) Calculate the maximum RWA amount that the bank would maintain to meet the minimum total risk-based capital ratio requirements. (5 points)
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