20. The CFO at a bank is preparing a report to the board of directors on its compliance with Basel requirements. The bank's average capital and total exposure for the most recent quarter is as follows:REGULATORY CAPITAL USD MILLIONSTotal Common Equity Tier 1 Capital 108Additional Tier 1 Capital 28Prior to regulatory adjustments 34Regulatory adjustments 6Total Tier 1 Capital 136Tier 2 Capital 36Prior to regulatory adjustments 45Regulatory adjustments 9Total Capital 172Total Average Exposure 3678Using the Basel III framework, which of the following is the best estimate of the bank’s current leverage ratio?a. 2.94%b. 3.70%c. 4.68%d. 5.08%2015FRM ®Practice Exam Part IIAnswers2015 Financial Risk Manager (FRM®) Practice Exama. b. c. d.

THE CFO AT A BANK IS PREPARING A REPORT TO THE BOARD OF DIRECTORS...

2015 FRM PRACTICE EXAM

20.

The CFO at a bank is preparing a report to the board of directors on its compliance with Basel requirements.

The bank's average capital and total exposure for the most recent quarter is as follows:

REGULATORY CAPITAL

USD MILLIONS

Total Common Equity Tier 1 Capital

108

Additional Tier 1 Capital

Prior to regulatory adjustments

Regulatory adjustments

Total Tier 1 Capital

136

Tier 2 Capital

Prior to regulatory adjustments

Regulatory adjustments

Total Capital

172

Total Average Exposure

3678

Using the Basel III framework, which of the following is the best estimate of the bank’s current leverage ratio?

2.94%

3.70%

4.68%

5.08%

2015 Financial Risk Manager (FRM®) Practice Exam