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Below is a modified balance sheet of Western Alliance Bank based in Phoenix, AZ. Western Alliance Bank thousands of dollars Assets Reserves Loans $489

Below is a modified balance sheet of Western Alliance Bank based in Phoenix, AZ. Western Alliance Bank thousands of dollars Assets Reserves Loans $489 Federal Funds lent $70 Short-term loans to businesses $4372 Consumer loans Real Estate Loans Securities Other Source: FDIC Liabilities + Capital Checkable Deposits Savings deposits Federal Funds borrowed $15 Borrowing $8,869 $3,491 $4,875 $1,920 $17,213 $21 b. (2 pts)ROA for Western Alliance was 2.09%. Calculate ROE. $513 a. (2 pts) Calculate capital and leverage ratio of Western Alliance Bank. c. (2 pts) Suppose prevailing interest rates increase. What are the benefits and detriments (costs) to Western Alliance as well as to any commercial bank when interest rate increase?

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