Use the following information about Sigma Bank to answer the…
Use the following information about Sigma Bank to answer the following two questions. Sigma Bank has the following off-balance sheet items. All off-balance sheet items are associated with corporate customers (not governments or sovereigns), and hence, their risk weights are 100%. Off balance sheet contingent liabilities:$80 million direct-credit substitute standby letters of credit issued to a U.S. corporation (conversion factor: 100%)$30 million commercial letters of credit issued to a corporation (conversion factor: 20%)Off-balance sheet derivatives $200 million 10-year interest rate swaps (conversion factor: 1.5%)