Question 1 (25 Marks) Townsville Bank has the following financial data: a. Assets Reserves T-bills Townsville Bank Liabilities Mil $500 Saving deposits $900 Inter-bank borrowed funds $1,600 Bank capital $2,000 Mil $3,200 $800 $1,000 Commercial loans Mortgage loans Assume the required reserve ratio is 10%. i. Determine if Townsville Bank is currently holding any excess reserve. Draw the T-account for Townsville Bank to show your answers. 3 marks ii. On the next day of operation, customers decide to withdraw $400 million saving deposits from Townsville Bank. Draw the T-account for Townsville Bank after the $400 million saving deposit outflow. Is there a problem created by the withdrawal? Explain your answers. 4 marks iii. Identify and explain FOUR options available for Townsville Bank to resolve the problem identified in above question (a)(ii). What are the costs associated with each of the options suggested? To illustrate your answers, you are required to draw the T-account for each of the options suggested. 14 marks Question 1 (25 Marks) Townsville Bank has the following financial data: a. Assets Reserves T-bills Townsville Bank Liabilities Mil $500 Saving deposits $900 Inter-bank borrowed funds $1,600 Bank capital $2,000 Mil $3,200 $800 $1,000 Commercial loans Mortgage loans Assume the required reserve ratio is 10%. i. Determine if Townsville Bank is currently holding any excess reserve. Draw the T-account for Townsville Bank to show your answers. 3 marks ii. On the next day of operation, customers decide to withdraw $400 million saving deposits from Townsville Bank. Draw the T-account for Townsville Bank after the $400 million saving deposit outflow. Is there a problem created by the withdrawal? Explain your answers. 4 marks iii. Identify and explain FOUR options available for Townsville Bank to resolve the problem identified in above question (a)(ii). What are the costs associated with each of the options suggested? To illustrate your answers, you are required to draw the T-account for each of the options suggested. 14 marks