-DPR dividend payout ratio (portion of earnings available to common stockholders pad out as dividends), thus 1-DPR = Retention Ratio. Each of these six segments of question #5 is worth 3 points. 5. Argue conceptually whether you agree or disagree, using reference to the relationships expressed in the numbers/data provided concerning the bank's financial statements, with each of the next statements. Assume-all else stays the same for each statement. Answers may take the form of a sentence or two, but no larger than a simple paragraph. a. If market interest rates rise next year, the GAP will rise causing ROA and ROE to rise. b. If Required Reserves were to add an additional 3% to the Uses for Funds causing a movement of funds from other accounts, then the GAP, the ROA \& ROE would all rise. c. Replacing \$1 billion in five-year NCDs with \$1 billion of 1 -year NCDs will increase ROA \& ROE d Provide a brief explanation as to why the bank would be cautious (concerned) with the longer -term umpact of the decision to use fewer S year NCDs and more 1-year NCDs in part c c. Shitting $1 billion from T-bills to make small business loans will raise ROA and would increase (improve) its liquidity position. f. The bank will teplace $200 million in five-year NCDs with a variable rate preferred atock iswe bused on the 1-year NCD rate +2%. This change in Capital will reduce ROA but increase ROE. (You may show Calculation rather than explain in words.) The following is based upon an Integrative Problem that at one time was in the text -but is no longer. On-Line Assignment Complete the INCONE STATEMENT on the worksheet provided using the balance sheet (Source and Ese Approach) data provided, then answer the questions concerning the impact of changes to the balance sheet on the "bottom line" performance of the institution. Use the information provided to forecast the earnings and expenses associated with the Sources and Uses of the bank finds for each category in the order listed and then answer the questions asked. Curnent Treasury Bill nate is 0.5%. Difference between Assets and Liabilities must be Equity (Capital)