The balance sheet for Great Southern Bank as of yesterday is shown below. Use it to answer questions 1-4. The required reserve ratio is 12%.

Asset			Liabilities
Vault Cash	300,000		Checkable Deposits	3,600,000
Reserves at the Fed	850,000		Saving Deposits	5,300,000
30 day Treasury Bills	3,400,000		Long-term Time Deposits	1,700,000
10 year Treasury Bonds	2,600,000		Discount Loans	0
Mortgages	5,350,000		Federal Funds Loans	1,000,000
Federal Funds Loans	0		Bank Capital	900,000

1. Use the original balance sheet for this question. Suppose that interest rates are rising so bond prices are falling. In todays trading, the value of Great Southern Banks 10-year treasury bonds falls by $75,000. Check the two items below that you think would occur on their balance sheet. Question options:
   1. ___ Reserves at the Fed would decrease by $75,000.
   2. ___ 10-year treasury bonds would decrease by $75,000.
   3. ___ Mortgage loans would decrease by $75,000.
   4. ___ Total reserves would increase by $75,000.
   5. ___ Federal Funds loans would increase by $75,000.
   6. ___ Checkable deposits would decrease by $75,000.
   7. ___ Discount Loans would increase by $75,000.
   8. ___ Bank capital would decrease by $75,000.