If a life insurance company has risk-based assets as indicated in the table below, how much equity must it have?

Risk category		Description	Risk adjusted charge (millions)
C0		Asset risk – affiliates	4.25
C1
C1cs	Asset risk – Common stock	7.50
C!o	Asset risk – Other investments	3.50
C2		Insurance risk	9.00
C3
C3a	Credit risk	4.75
C3b	Interest rate risk	6.35
C3c	Market risk	3.60
C4
C4a	Business risk	4.00
C4b	Administrative risk	1.25

Answer rating: 100% (QA)

answer a risk asset refers to an asset owned by a bank or financial institution whose value may fluc... View the full answer