1.In what ways would you say a bank's balance sheet differs from, say, a car manufacturing firm's?

2. Identify at least three options available to a bank's liquidity management division when an unexpected shortfall in reserves occurs. You may use figures or T-tables to illustrate your understanding. The reserve requirement is set at 10%.

3. "Higher bank capital is always a good thing." Do you agree with this statement? Why or why not?

4. Identify at least three types of Tier 1 and Tier 2 capital.