Janice is the chief financial officer (CFO) of Smart Bank, a Singapare based commercial bank with digital banking license. Smart Bank announced its financial statement recently. On the board meeting, Janice was tasked to address the questions pertaining to the financial statement of Smart Bank. Balance Sheet of Smart Bank as at 31st December 2021 Assets $ '000 Notes Current Assets Cash & equivalents $15,000,000 Short-term Treasury Securities 4,000,000 Investment grade Short-term Commercial Papers 2,500,000 Investment grade Non-Current Assets Mortgagges 100,000,000 Long-term Government Bonds 6,000,000 AAA rated including foreign bonds Long-term Corporate Bonds 1,000,000 AA rated including foreign bonds Total Assets $128,500,000 Liabilities Current Liabilities Savings 10,000,000 Repos 1,560,000 Bank Bills 12,000,000 Long-term Liabilities Long-term Corporate Bonds 10,000,000 AA rated corporate bonds Net Assets Value 94,940,000 Equities $94,940,000 Page 4 of 5 Exams SP53, 2021 BX2133 Management Financial Institutions Note: Maturity of long-term investments is an average 10 years. Maturity of long-term financing is an average 15 years. a. If you were one of the directors of Smart Bank, which five potential risks the bank exposes to you would like to ask Janice on the board meeting? (5 marks) b. Compute the current ratio and gearing ratio of Smart Bank in 2021. Discuss your answers. (6 marks) c. If you were the CFO of Smart Bank, choose three risks to illustrate how you would hedge them based on the information in the balance sheet. (5 marks) d. List four factors which you think affecting the long-term corporate bonds which Smart Bank invests and issues. (4 marks)