(a) COG Bank has acquired Retire Well Pension Fund. To help finance the takeover, COG will liquidate the overfunded portion of Retire Well's pension fund. The face values and current and one-year future liquidation values of the assets that will be liquidated are given below. Liquidation values t = 0 t = 1 Asset Rio shares TNT bonds Government securities Face value $10 000 5 000 15 000 $ 9900 4 000 13 000 $10 500 4 500 14 000 Calculate the one-year liquidity index for these securities. (6 marks) (b) COG Bank has the following balance sheet (in millions): Assets Cash Loans Securities Total assets Liabilities and equity $60 Deposits $220 180 Borrowed funds 80 100 Equity 40 $340 Total liabilities and equity $340 One of COG Bank's customers decides to exercise a $30 million loan commitment. (i) How will the new balance sheet appear if COG uses stored liquidity management to meet the loan drawdown? (4 marks) (ii) How will the new balance sheet appear if COG uses purchased liquidity management to meet the loan drawdown? (4 marks) (iii) Are the two methods of liquidity management equivalent in their effect on the size of COG bank? Explain. (2 marks)