Consider the following balance sheet information about your bank: Bank NWL 15bn (Reserves) 120bn (Deposits) 5bn (Bonds) 15bn (Bank Loans) 30bn (Marketable 15bn (Capital) Securities 100bn (Loans) Assume that reserves, deposits, and bank loans are not rate sensitive assets. a) Calculate the gap for this financial institution and explain whether you think it is more vulnerable to an increase or decrease in the interest rate. [5 points) b) Assume that the bank's bond portfolio is comprised of 5 million units of short-term government bonds, all of which are worth the same. Assuming these are discount bonds, i.e., they do not pay a coupon, which have a yield of 1%, calculate their face value. [10 points] c) If several large depositors suddenly need to transfer 20bn worth of deposits away from the bank, does the bank have enough reserves to quickly do so? If not, explain at least two options that the bank has at its disposal and show how either one would affect the bank's balance sheet (assume that it is possible for the bank to hold 0 reserves). [10 points) Consider the following balance sheet information about your bank: Bank NWL 15bn (Reserves) 120bn (Deposits) 5bn (Bonds) 15bn (Bank Loans) 30bn (Marketable 15bn (Capital) Securities 100bn (Loans) Assume that reserves, deposits, and bank loans are not rate sensitive assets. a) Calculate the gap for this financial institution and explain whether you think it is more vulnerable to an increase or decrease in the interest rate. [5 points) b) Assume that the bank's bond portfolio is comprised of 5 million units of short-term government bonds, all of which are worth the same. Assuming these are discount bonds, i.e., they do not pay a coupon, which have a yield of 1%, calculate their face value. [10 points] c) If several large depositors suddenly need to transfer 20bn worth of deposits away from the bank, does the bank have enough reserves to quickly do so? If not, explain at least two options that the bank has at its disposal and show how either one would affect the bank's balance sheet (assume that it is possible for the bank to hold 0 reserves). [10 points)