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Show how the common equity capital ratio would change

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Reference no: EM133117253

Question - A bank's assets consist of the following:

Cash $1.5 million

Loans $10 million

Securities $4.5 million

Fixed assets $2 million

In addition, the bank's common equity is $1.5 million.

Required - Calculate the common equity capital ratio

If $2 million in bad loans were removed from the bank's assets, show how the common equity capital ratio would change.

Reference no: EM133117253

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