Please answer if True/False and give a valid explanation.

1. When considering an institutions capital plan, the Federal Reserve considers only quantitative factors. The only factor that matters is a firms capital ratios under severe economic and financial market stress. After the Federal Reserve objects to a capital plan, the institution may only make capital distributions that are equal to the distributions made in the previous year.

a. True/False

2. A bank that funds a portfolio of assets with higher credit risk than another bank has to have more equity capital if creditors are to be indifferent between lending to either bank.

a. True/False

3. Bank holding companies can issue common stock to raise equity capital.

a. True/False

4. The interest rate spread between 3 month financial commercial paper and 3 month constant maturity treasury securities declined from 160 basis points on June 15^th, 2007 to 58 basis points on August 24, 2007. This is because the Fed was active in adding reserves to the banking system.

a. True/False