Savings Bank Ltd. Balance sheet As at 31/12/2015 Assets $(000) Liab. & Equity $(000) Cash 50,000 Payables 50,000 Investments 150,000 Deposits 500,000 Loans 450,000 Long-term bonds 50,000 Other 50,000 Equity 100,000 Total 700,000 700,000 The investment portfolio comprises shares in an associate company (30%), a zero coupon bond (30%), government bonds (10%) and shares in publicly traded companies (30%). The loan portfolio has 5% delinquency and the average return is 8%. Deposits are primarily short term. The renewal rate is declining and expected to continue into the medium term. The average deposit rate is 4%. Interest rates are expected to rise in the short term. A Based on the balance sheet and the information above, identify three risks facing the bank? Explain. (6 marks) B Recommend to management one strategy to reduce each risk. (6 marks) C Discuss the bank's capital adequacy based on the information given. (3 marks)