(a) The balance sheet of FNBNA is shown as below: First National Bank of North America (FNBNA) Assets Liabilities and Equity Amount Rate of Amount (million $) Return (million $) $ 10 0.00% Core deposits $ 80 30 5.50% Borrowings 10 9.00% Equity 10 $ 100 Total $ 100 Cost Rate 4.00% 7.00% Cash Securities Loans Total 60 Calculate the change of pretax net income if FNBNA expects $20 million net deposit drain and the bank will fund the drain by the following ways (consider each scenario separately): (i) Additional borrowing with the borrowing cost the same as its existing borrowed funds. (ii) Selling securities at 20% below the book value. (6 marks) (b) Identify TWO measures adopted by financial institutions to reduce their liquidity risk. (2 marks)