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Fransa Arab Banque is attempting to determ ne its liquidity requirements of the last day of the current month of February. At the end of this month the bank expects a thrift in its deposit accounts mainly due to the investments of its business customers in goods and services for the spring summer season. Management has elected to hold 75% reserve in liquid assets or borrowing capacity for each dollar of hot money deposits, 20% reserve behind vulnerable deposits, and a 5% reserve for its holdings of core funds. The bank currently has total loans outstanding of $2,389 million which two weeks ago were as high as $2,567 million. In addition, the bank has $132 million classified as Hot Money Funds, $207 million as Vulnerable Funds, and $821 as Core Funds. 1. What is above bank's total liquidity requirement for the said planning period. 2. Do you consider the above bank as adequately liquid? Is its position in deficit or surplus. Justify your answer. 3. Given your answer to question 2 above what would be your proposed liquidity management if the bank expects a liquidity surplus or liquidity deficit? Justify your answer. 4. Is the above bank using the sources and uses of funds approach to estimate its need for liquidity or structure of funds approach? Justify your answer. 5. What are the steps needed to carry our the sources and uses of funds approach 6. If you were the liquidity manager of the above bank, would you have chosen sources and uses of funds approach to estimate the bank's need for liquidity or structure of funds approach? Justify your answer clearly stating your own opinion and supporting arguments. 1:43:06 Fransa Arab Banque is attempting to determ ne its liquidity requirements of the last day of the current month of February. At the end of this month the bank expects a thrift in its deposit accounts mainly due to the investments of its business customers in goods and services for the spring summer season. Management has elected to hold 75% reserve in liquid assets or borrowing capacity for each dollar of hot money deposits, 20% reserve behind vulnerable deposits, and a 5% reserve for its holdings of core funds. The bank currently has total loans outstanding of $2,389 million which two weeks ago were as high as $2,567 million. In addition, the bank has $132 million classified as Hot Money Funds, $207 million as Vulnerable Funds, and $821 as Core Funds. 1. What is above bank's total liquidity requirement for the said planning period. 2. Do you consider the above bank as adequately liquid? Is its position in deficit or surplus. Justify your answer. 3. Given your answer to question 2 above what would be your proposed liquidity management if the bank expects a liquidity surplus or liquidity deficit? Justify your answer. 4. Is the above bank using the sources and uses of funds approach to estimate its need for liquidity or structure of funds approach? Justify your answer. 5. What are the steps needed to carry our the sources and uses of funds approach 6. If you were the liquidity manager of the above bank, would you have chosen sources and uses of funds approach to estimate the bank's need for liquidity or structure of funds approach? Justify your answer clearly stating your own opinion and supporting arguments. 1:43:06