Rbc requirements may induce bank managers to change their


RBC requirements may induce bank managers to change their asset composition. Explain why. Determine how a shift from any of the following should affect a bank's required capital. How will each shift affect the bank's profit potential?

a. From consumer loans to 1- 4 family mortgages

b. From U. S. agency securities to construction loans

c. From FNMA sponsored mortgage backed securities to municipal revenue bonds

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Financial Management: Rbc requirements may induce bank managers to change their
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