First National Bank of XXL reports tier-one capital of $60 million and tier two capital of $70 million.

First National Bank of XXL reports tier-one capital of $60 million and tier two capital of $70 million. First National has assets of $10 million with a risk weight of zero, assets of $350 million with a 0.2 risk weight, assets of $680 million with a 0.5 risk weight, and assets of $1,010 million with a risk weight of 1.00. What is First National’s total risk-weighted assets? Does the bank have enough tier-one capital under the terms of the Basel I Agreement? Enough total capital? Why or why not? Would this bank likely have to conform to the rules of the Basel II agreement when Basel II takes full effect?

(In millions)Total Assets103506801,010 00.20.51 07034010101,420.00 Total Risk weighted AssetsMinimum required Tier 1 CapitalRequired Tier 1 Capital 1,420 (RWA)4% (T1)57 (RWA * T1)…

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