Question

An onshore bank has 20 million in assets, with risk-weighted assets of 10 million. What is the risk-weighted asset ratio of the bank?

1) 0.5
2) 1
3) 2
4) 10

Answer 1

The risk-weighted asset ratio of the bank is calculated by dividing its total assets (20 million) by its risk-weighted assets (10 million), resulting in a ratio of 2.

Step-by-step explanation:

The question asks to calculate the risk-weighted asset ratio of a bank. This ratio is determined by dividing the bank's total assets by its risk-weighted assets. In this case, the bank has 20 million in assets and risk-weighted assets of 10 million.

To find the risk-weighted asset ratio, we use the following calculation:

• Total Assets / Risk-Weighted Assets = Risk-Weighted Asset Ratio

Substituting the given values:

• 20 million / 10 million = 2

Therefore, the risk-weighted asset ratio of the bank is 2.