12-1. Rhinestone National Bank reports the following figures in its current Report of Condition:

Assets (millions)		Liabilities and Equity (millions)
Cash and interbank deposits	$50	Core deposits	$50
Short-term security investments	15	Large negotiable CDs	150
Total loans, gross	400	Deposits placed by brokers	65
Long-term securities	150	Other deposits	45
Other assets	10	Money market liabilities	195
		Other liabilities	65
		Equity capital	55
Total assets	$625	Total liabilities and equity capital	$625

1. a. Evaluate the funding mix of deposits and nondeposit sources of funds employed by Rhinestone. Given the mix of its assets, do you see any potential problems? What changes would you like to see management of this bank make? Why?
2. b. Suppose market interest rates are projected to rise significantly. Does Rhinestone appear to face significant losses due to liquidity risk? Due to interest rate risk? Please be as specific as possible