Suppose a bank has the following assets and liabilities on its balance sheet. Assets: Mortgages: $2,000 Cash: $300 O O O Investments: $700 Liabilities O O Debt: $200 Deposits: $800 What is the bank's current equity (or net worth)? What is the bank's current leverage? Suppose there is widespread flooding that damages 50% of the houses near the banks. This causes the bank's mortgage portfolio to decrease in price by 50%. What is the new equity and leverage?