TABLE 9.4 Liquidity Risk at Melvin's Bank (A) Initial Balance Sheet Assets Liabilities and Net Worth Reserves Securities Loans BO 50 10 Checking Depouts 30 Nontransaction Deponits 80 Net Worth 120 TOTAL TOTAL 120 IN TABLE 9.2 Income Statement for Melvin's Bank For the year ended December 31, 2021 Interest Income Securities 4961830) - $120 Loans 8% ($80) $6.40 Total $7.50 Noninterest Income $5.00 Kletters of credit) TOTAL INCOME Interest Expense 49 ($60) - $2.00 savings accounts) Noninterest Expense $6.00 (salaries, etc.) TOTAL EXPENSE $12.60 $8.00 $4.60 PROFITS (income Expense) profits $4.60 ROA 3.8% assets $120 profits $4.60 ROE - + 23% capital $20 Suppose Melvin's Bank starts with the balance sheet in Table 9.4A and the income statement in Table 9.2 above Show how the balance sheet and income statement change in each of the following scenarios (Each scenario is a separate one.) Also calculate the new ROA and ROE for each scenarios. If there is a change in the balance sheet, be sure to provide a new balance sheet. a. The bank issues $15 of new stock and uses the proceeds to make loans to another bank in the federal funds market. (Assume the federal-funds rate is the same as the Treasury-bill (securities) rate.) b. The bank issues an additional letter of credit, for which it is paid $10 a year. At the same time, an additional bank manager is hired by the bank and her salary is $5 per year