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Bank ABC had the following balance sheet: ($) Assets Liab & Equity Cash 9Deposits70Investment Portfolio40Borrowed funds10Other assets51Other liabs10 Equity capital10 Total assets100Total liab + equity100

Bank ABC had the following balance sheet:

($)AssetsLiab & EquityCash

9Deposits70Investment Portfolio40Borrowed funds10Other assets51Other liabs10Equity capital10Total assets100Total liab + equity100

There is a drop of $ 5 MM in the investment portfolio. If the bank decides to use thePurchase Liquidity Management(PLM) to make up for the investment loss, then, in the adjusted balance sheet

a.

Deposits will go down by $ 5

b.

Other liabilities will go up by $ 5

c.

Cash will go down by $ 5

d.

Other assets will go down by $ 5

e.

Borrowed funds will go up by $ 5

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