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- 7. A FI. has the following balance sheet: Balance Sheet (S'm) Assets Liabilities Cash 20 Deposits 1900 Govt Securities 20 Borrowed Funds 100 Loans

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- 7. A FI. has the following balance sheet: Balance Sheet (S'm) Assets Liabilities Cash 20 Deposits 1900 Govt Securities 20 Borrowed Funds 100 Loans 2000 Ordinary Shares 50 Fixed Assets 50 Retained Earnings 40 and Reserves Total 2090 Total 2090 The RBA increases the overnight rates by 150 basis points and the borrowers react by exercising their loan commitments. Loan commitments have a value of $30m. How would you asset and liability manage the bank's liquidity position? Justify your

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