3. A securities firm has provided the balance sheet below.

Assets ($ millions) Liabilities and Equity ($ millions)

Cash $ 75 Short-term funding $ 32

Debt securities 250 Bonds 425

Equity securities 600 Debentures 280

Other assets 55 Equity 243

Total Assets $ 980 Total Liabilities and Equity $ 980

The debt securities have an annual 8.00% coupon rate, 15 years to maturity and a yield to maturity of 8.50%. The market value of the equity securities and the other assets is equal to their book value. The firm has 800,000 shares outstanding and the price per share is $55.75.

a. Calculate the firms aggregate indebtedness to net capital ratio. (6 points)

b. Calculate the firms highly liquid assets to total liabilities ratio. (6 points)

c. Based on the firms ratios from a and b, is it in compliance with Rule 15C 3-1? Why or why not? (4 points)