(Answered) Bank x lends only to aaa rated companies and all of its

Economics

Bank X lends only to AAA rated companies and all of its loans are secured. Bank Y lends only to BBB rated companies. Its loans are unsecured. Both banks issue FDIC insured deposits and both banks borrow by issuing five year bonds. Bank X would have to have a higher amount of capital on its balance sheet than Bank Y according to Federal banking Regulations.

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