2. Financial Accounting a. Suppose First National Bank has the following assets on their balance sheet...

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2. Financial Accounting a. Suppose First National Bank has the following assets on their balance sheet (in millions). Give and explain a reason for and against First National Bank's decision to hold this many stocks, corporate bonds, and commodities as assets? Required Reserves Excess Reserves Mortgage Loans Corporate Loans Stocks Commodities $10 $5 $20 $15 $25 $25 b. If the housing market suddenly crashed, what type of change would you see in their balance sheets? Would First National be better off using a mark-to-market accounting system or the historical-cost system? c. If the price of commodities suddenly increased sharply, would First National be better off using a mark-to-market accounting system or the historical-cost system? d. What do your answers to parts (b) and (c) tell you about the tradeoffs between the two accounting systems? 2. Financial Accounting a. Suppose First National Bank has the following assets on their balance sheet (in millions). Give and explain a reason for and against First National Bank's decision to hold this many stocks, corporate bonds, and commodities as assets? Required Reserves Excess Reserves Mortgage Loans Corporate Loans Stocks Commodities $10 $5 $20 $15 $25 $25 b. If the housing market suddenly crashed, what type of change would you see in their balance sheets? Would First National be better off using a mark-to-market accounting system or the historical-cost system? c. If the price of commodities suddenly increased sharply, would First National be better off using a mark-to-market accounting system or the historical-cost system? d. What do your answers to parts (b) and (c) tell you about the tradeoffs between the two accounting systems?