1) Consider the information about FNBA: Assets Rate Run mil$ Cash $ 10 0.0% Cost Rate Liab&OE mil$ $ 80 Core deposits 4.0% 5.5% 7.0% Securities Loans 30 60 Borrowings Equity 10 10 9.0% Total $ 100 Total $ 100 a) If FNBNA is expecting a $20 million net deposit drain and the bank wishes to fund the drain by borrowing more money, how much will pretax net income change if the borrowing cost is the same as on its existing borrowed funds? b) What if instead the bank funds the net drain with selling securities. How much will pretax net income change in this case? 2) A financial intermediary has two assets in its investment portfolio. It has 35 percent of its security portfolio invested in one-month Treasury bills and 65 percent in real estate loans. If it liquidated the bills today, the bank would receive $98 per hundred of face value. If the real estate loans were sold today, they would be worth $85 per $100 of face value. In one month, the real estate loans could be liquidated at $94 per $100 of face value and the bills at 100%. What is the intermediary's one-month liquidity index