The New Bank Ltd. Balance sheet As at 31/12/2016 Assets $(000) Liab. & Equity $(000) Cash 30,000 Payables 50,000 Investments 180,000 Deposits 500,000 Loans 550,000 Long-term bonds 70,000 Other 20,000 Equity 160,000 Total 780,000 780,000 The investment portfolio comprises shares in two associate companies (40%), a zero coupon bond (30%) and shares in publicly traded companies (30%). The loan portfolio has 10% delinquency and the average return is 8%. Deposits are primarily short term. The renewal rate is declining and expected to continue into the medium term. The average deposit rate is 4%. Interest rates are expected to hold over the short term a) Based on the balance sheet and the information above, identify three (3) risks facing the bank? Explain. (3 marks) b) Recommend to management two strategies to reduce each risk identified in (a) above. (4 marks) c) Discuss the banks capital adequacy based on the information given. (5 marks)