) A firm with a low Z-score has high

A) insolvency risk.

B) interest rate risk.

C) liquidity risk.

D) international risk.

E) None of these options are correct.

33) Cost Rate First National Bank of North America (FNBNA) Assets Liabilities and Equity Amount Rate of Amount (million $) Return (million $) $ 10 0.00% Core deposits $ 80 5.50% Borrowings 10 9.00% Equity 10 $ 100 Total $ 100 4.00% 7.00% 30 Cash Securities Loans Total If FNBNA is expecting a $15 million net deposit drain and the securities liquidity index is 0.98, how many securities would have to be liquidated if the bank used only its securities to fund the expected deposit drain? A) $15,000,000 B) $16,444,331 C) $15,600,000 D) $15,306,122 E) $16,772,345 34) Second National Bank (SNB) (million $) Funds borrowed Maximum amount SNB can still borrow Cash-type assets Excess cash reserves Federal Reserve borrowings $ 6,500 $ 8,500 $ 3,700 80 $ 20 33) Cost Rate First National Bank of North America (FNBNA) Assets Liabilities and Equity Amount Rate of Amount (million $) Return (million $) $ 10 0.00% Core deposits $ 80 5.50% Borrowings 10 9.00% Equity 10 $ 100 Total $ 100 4.00% 7.00% 30 Cash Securities Loans Total If FNBNA is expecting a $15 million net deposit drain and the securities liquidity index is 0.98, how many securities would have to be liquidated if the bank used only its securities to fund the expected deposit drain? A) $15,000,000 B) $16,444,331 C) $15,600,000 D) $15,306,122 E) $16,772,345 34) Second National Bank (SNB) (million $) Funds borrowed Maximum amount SNB can still borrow Cash-type assets Excess cash reserves Federal Reserve borrowings $ 6,500 $ 8,500 $ 3,700 80 $ 20