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FORUM DESCRIPTION (a) Explain the following bank management activities: liquidity management, asset management, liquidity management, capital adequacy management, credit risk management, interest-rate risk management Consider

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FORUM DESCRIPTION (a) Explain the following bank management activities: liquidity management, asset management, liquidity management, capital adequacy management, credit risk management, interest-rate risk management Consider the Loan Shark Bank (LSB) with the balance sheet shown below, which is subject to a 10 percent required reserves ratio. Use this information to answer parts (b) and (c). Assets Liabilities $100 Reserves Loans Securities $20 $80 $30 Deposits Loans from Comm. Banks Loans from the Fed Bank Capita $ 10 s 10 $ 10 (b) Given the information about LSB, consider the following two transactions. First, John deposits $2 in LSB. Then, Juan withdraws $5 from his savings account at LSB. Use a T-account to represent the changes in the LSB balance sheet from each transaction-that is, you need to show two T-accounts. Then, show LSB balance sheet after both transactions have taken place. (c) Given the information about LSB-discard the transactions from part (b,could LSB remain in business if it suffers a 10 percent loss in its securities? Explain your answer and show the resulting LSB balance sheet if this scenario occurs

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