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OhBank Bank is a small Australian bank that specialises in providing home loans to citizens in regional population centers. The relevant domestic regulator has published the following table of risk weights of different residential mortgage types for the purpose of assessing whether a bank's capital adequacy requirements have been met.

	STANDARD ELIGIBLE MORTGAGES		NON-STANDARD ELIGIBLE MORTGAGES
LVR (%)	No LMI	At least 40% insured with LMI	No LMI	At least 40% insured with LMI
0-60	35%	35%	50%	35%
60.01-80	35%	35%	75%	50%
80.01-90	50%	35%	100%	75%
90.01-100	75%	50%	100%	75%
>100.01	100%	75%	100%	100%

"LMI" = Lenders Mortgage Insurance

You have the following formation about some home loans that OhBank Bank issued recently:

• A loan of $570,000 to Mr Singh, a young bachelor who purchased an apartment in Wollongong for $600,000. Mr Singh took out lenders mortgage insurance ("LMI") on the full value of the property.
• A loan to Mr & Mrs Huang for buying a 6-bedroom house in Coffs Harbour at a purchase price of $3.7 million. They chose not to take out LMI, despite repeated suggestions from their loan officer. After much saving, they were able to put down a deposit of $0.925 million toward the purchase price.
• A loan to Bad Luck Brian, who borrowed 85% of his house's $900,000 purchase price and obtained full LMI. Since taking possession of the house, Brian's house has been exposed to a toxic chemical leak. OhBank's independent valuer estimates this will cause Brian's house to fall in value by 95%. In addition, they estimate the property will not be able to be sold for 10 years.

Assuming Basel III requirements, what is the minimum amount of total capital (T1 + T2) required to support these 3 mortgages?

Select one:

a. $0.3288 million

b. $0.1356 million

c. I am unable to answer this question and accept 0 marks.

d. $0.2284 million

e. $0.3060 million

f. $0.1617 million

g. $0.1882 million

h. $0.1099 million