Suppose the bank you own has the following balance sheet in millions:

Assets Liabilities Reserves $750 Securities $500 Loans $4750 Deposits $5000 Bank Capital $1000 If the bank suffers a deposit outflow of $500 million with a required reserve ratio on deposits of 10%, present four balance sheets showing 4 basic options the bank can use to acquire reserves to meet the deposit outflow: IV. Consider the "High Capital Bank" in the lecture slides. Suppose further that the return on assets (ROA) is 2%. A. Calculate the ROE B. Suppose the owners wish to increase the ROE to 30%. Assuming the ROA is fixed, what can the bank do in order to achieve this target? C. What are the hazards of this option? V. Suppose that you are the manager of a bank that has $25 million of fixed-rate assets (FRA), S10 million of rate-sensitive assets, S10 million of fixed-rate liabilities (FRL), and $25 million of rate-sensitive liabilities. Conduct a gap analysis for the bank, and show what will happen to bank profits if interest rates rise by 2.5 percentage points Assets Liabilities Reserves $750 Securities $500 Loans $4750 Deposits $5000 Bank Capital $1000 If the bank suffers a deposit outflow of $500 million with a required reserve ratio on deposits of 10%, present four balance sheets showing 4 basic options the bank can use to acquire reserves to meet the deposit outflow: IV. Consider the "High Capital Bank" in the lecture slides. Suppose further that the return on assets (ROA) is 2%. A. Calculate the ROE B. Suppose the owners wish to increase the ROE to 30%. Assuming the ROA is fixed, what can the bank do in order to achieve this target? C. What are the hazards of this option? V. Suppose that you are the manager of a bank that has $25 million of fixed-rate assets (FRA), S10 million of rate-sensitive assets, S10 million of fixed-rate liabilities (FRL), and $25 million of rate-sensitive liabilities. Conduct a gap analysis for the bank, and show what will happen to bank profits if interest rates rise by 2.5 percentage points