Suppose that a U.S. FI has the following assets and liabilities: Assets Liabilities $500 million $1,000 million U.S. loans (one year) U.S. CDs (one year) in dollars in dollars $300 million equivalent U.K. loans (one year) (loans made in pounds) $200 million equivalent Turkish loans (one year) (loans made in Turkish lira) The promised one-year U.S. CD rate is 4 percent, to be paid in dollars at the end of the year; the one-year, default riskfree loans are yielding 7 percent in the United States; one-year, default riskfree loans are yielding 8 percent in the United Kingdom; and one-year, default riskfree loans are yielding 10 percent in Turkey. The exchange rate of dollars for pounds at the beginning of the year is $1.3/1, and the exchange rate of dollars for Turkish lira at the beginning of the year is $0.1664/TL1.

1. Suppose that instead of funding the $300 million investment in 8 percent British loans with U.S. CDs, the FI manager funds the British loans with $300 million equivalent one- year pound CDs at a rate of 5 percent and that instead of funding the $200 million investment in 10 percent Turkish loans with U.S. CDs, the FI manager funds the Turkish loans with $200 million equivalent one-year Turkish lira CDs at a rate of 6 percent. What will the FIs balance sheet look like after these changes have been made?