Suppose a bank’s loan portfolio suffers a large number credit downgrades, increasing risk-weighted assets (RWA). Which of the following approaches would help the bank meet its new (increased) regulatory capital requirements?

a. Increase Tier 1 capital by paying out dividends.
b. Increase Tier 2 capital by issuing more subordinated debt or preferred stock.
c. Purchase treasury securities to reduce the overall riskiness of its loan portfolio.
d. Increase Tier 2 capital by issuing senior secured debt.

In 2007, americans smoked 19.2 billion packs of cigarettes. they paid an average retail price of $4.50 per pack. a. given that the elasticity of supply is 0.50.5 and the elasticity of demand is negative 0.4−0.4, derive linear demand and supply curves for cigarettes. the demand equation is qdequals=nothingplus+nothing times ×p and the supply equation is qsequals=nothingplus+nothing times ×p.

In three to four sentences, explain the effect of a price ceiling on the quantity of a good and who this intervention intends to assist

The treasurer for pittsburgh iron works wishes to use financial futures to hedge her interest rate exposure. she will sell five treasury futures contracts at $139,000 per contract. it is july and the contracts must be closed out in december of this year. long-term interest rates are currently 7.30 percent. if they increase to 9.50 percent, assume the value of the contracts will go down by 20 percent. also if interest rates do increase by 2.2 percent, assume the firm will have additional interest expense on its business loans and other commitments of $149,000. this expense, of course, will be separate from the futures contracts. a. what will be the profit or loss on the futures contract if interest rates increase to 9.50 percent by december when the contract is closed out