Note: the Residential Mortgages All Have a Loan-To-Value of Between

$\begin{array}{lccc} \text {Cash and Treasury securities}& \text { \$ 100 million}\\ \text { FedFunds Sold }& \text { \$ 100 million}\\ \text { Resiclential Mortgages 1-4 family}& \text { \$ 200 million}\\ \text {Commercial Loans }& \text { \$ 600 million}\\\end{array}$
Note: The residential mortgages all have a loan-to-value of between 60 and 80 percent.
What is the ratio of capital to risk-adjusted assets,if the bank has capital of $50 million?

A) 5.00 percent.
B) 5.56 percent.
C) 6.94 percent.
D) 8.33 percent.
E) 6.25 percent.

Correct Answer:

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