Bank A has the following balance sheet (Unit: million). The required reserve ratio is 10% Liabilities Capital Assets Reserves $50 Deposits $ 200 Securities Loans $50 Borrowings $0 $ 120 Bank capital $ 20 Suppose this bank holds $25 million of securities issued by a firm that has declared bankruptcy and now, these securities become worthless. 1. Show the T-account describing the effect. (5%) 2. Update the balance sheet right after $25 of securities become worthless. (5%) Liabilities Assets Reserves $ Deposits Securities $ Borrowings Loans $ Bank capital $ 3. Will this bank become insolvent? Why? (5%)