a. You have recently been employed to a small community based financial institution, Ironshore Community Savings \& Loans, and you observe that there is no structure regarding how they borrow funds to meet unexpected large withdrawals or fund loan commitments, nor do they have a sense of the deposit patterns of their customers. Having just completed your MSc in Corporate Finance, you decide to make a presentation to your board indicating why it is necessary to develop and implement a plan to address this issue and outline the four components that it would entail. Prepare your notes to present. (No more than ONE PAGE) (5 marks) b. Ironshore Community Savings \& Loans Balance sheet is shown below (in millions): Show the new composition of the Ironshore Community Savings \& Loans' balance sheet if the following conditions occur. Show the new composition of the Ironshore Community Savings \& Loans' balance sheet if the following conditions occur. 4/5 i) You use a stored liquidity risk management strategy to accommodate a large customer exercising a $30 million loan commitment (5 marks) ii) You use a purchased liquidity risk management strategy to offset a net deposit drain of $50 million. (5 marks) c. In the event of an unexpected and severe drain on deposits in the next 3 days and 9 days Ironshore Community Savings \& Loans will liquidate assets in manner depicted in the table below ( t=3 days means in the next 3 days and t=9 days means in the next 9 days). Calculate the 3 day and 9 day liquidity Index. (5 Marks) a. You have recently been employed to a small community based financial institution, Ironshore Community Savings \& Loans, and you observe that there is no structure regarding how they borrow funds to meet unexpected large withdrawals or fund loan commitments, nor do they have a sense of the deposit patterns of their customers. Having just completed your MSc in Corporate Finance, you decide to make a presentation to your board indicating why it is necessary to develop and implement a plan to address this issue and outline the four components that it would entail. Prepare your notes to present. (No more than ONE PAGE) (5 marks) b. Ironshore Community Savings \& Loans Balance sheet is shown below (in millions): Show the new composition of the Ironshore Community Savings \& Loans' balance sheet if the following conditions occur. Show the new composition of the Ironshore Community Savings \& Loans' balance sheet if the following conditions occur. 4/5 i) You use a stored liquidity risk management strategy to accommodate a large customer exercising a $30 million loan commitment (5 marks) ii) You use a purchased liquidity risk management strategy to offset a net deposit drain of $50 million. (5 marks) c. In the event of an unexpected and severe drain on deposits in the next 3 days and 9 days Ironshore Community Savings \& Loans will liquidate assets in manner depicted in the table below ( t=3 days means in the next 3 days and t=9 days means in the next 9 days). Calculate the 3 day and 9 day liquidity Index
