Calculate the bank’s capital to asset ratio before and after the agreements. Does the bank meet the minimum capital ratio of 4%?

Consider a bank with the following balance sheet:

Assets		Liabilities & Capital
Required Reserves	$20 million	Checkable deposits	$250 million
Excess reserves	48 million
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Commercial loans	$100 million	Bank capital	$18 million

Assume the required reserve ratio is 8%. The bank enters into agreements to make loan commitments of $30 million to various commercial customers.

a) Calculate the bank’s capital to asset ratio before and after the agreements. Does the bank meet the minimum capital ratio of 4%?

b) Calculate the bank’s capital to risk-weighted asset ratio before and after the agreements.