2. A banks customer wants to exercise a $3,000,000 loan commitment. The bank purchases liquidity to provide the funds for the loan.

a. What is purchased liquidity?

b. The banks balance sheet before the loan commitment is exercised is below. Show the balance sheet after the loan is established using purchased liquidity.

Assets		Liabilities and Equity
Cash	$1,000,000		Deposits	$9,450,000
Loans	6,000,000		Equity	1,050,000
Securities	3,500,000
Total Asset	$10,500,000		Total Liabilities and Equity	$10,500,000