a) Assets and liabilities Bank of Unitama comprise of RM100 million in reserves, RM3200 million in loans, RM180 million in securities, RM460 million in deposits, and RM120 million of bank capital. The required reserve ratio on demand deposits is 10%.

(i) Provide the balance sheet of the Bank of Unitama.

(ii) Suppose a bank customer - Unisama Berhad withdraw RM80 million from its account with the bank. Show what happens to the balance sheet of the Bank of Unitama? What is the problem faced by the bank?

(iii) To solve the problem, Bank of Unitama sells RM20 million of its securities and borrows RM10 million from the central bank. Show the effect of these actions on the bank's balance sheet.

b) What is the effect of changes in interest rates on bank's profit? Explain.