THIS QUESTION 3 THAT NEEDS TO BE ANSWERED

2. Write out the balance sheet of this bank. Label your balance sheet carefully. Beside each item, write its face value; then write its market value, in parentheses, under its face value. 3. a. Calculate the exact prots earned by the bank, using a method that involves calculating a difference in market values. b. Calculate the approximate prots eamed by the bank, as we did in class, using a method that involves calculating an average interest spread. Note: Same note as for the corresponding part of Part A. Now suppose the bank changes its policy by setting aside $100 of the funds it receives by selling its small bills to purchase cash reserves, instead of buying large bills of exchange. It also changes the nature of its small bills, making them redeemable on demand and at par (convertible) and calling them \"notes." The holders of the bank's notes believe these reserves are large enough to allow the bank to honor this commitment. C. 1. What is the total face value of the bank's large bills? Explain your answer. a. b. 1. Calculate the market value ofthe bank's small bills. 2. Calculate the market value of the bank's large bills. 3. Calculate the market value of the bank's capital. 4. Calculate the market value of the bank's reserves. Note: Same note 2. Write out the balance sheet of this bank. Label your balance sheet carefully. Beside each item, write its face value; then write its market value, in parentheses, under its face value. 3. a. Calculate the exact prots earned by the bank, using a method that involves calculating a difference in market values. b. Calculate the approximate prots earned by the bank, as we did in class, using a method that involves calculating an average interest spread. Note: Same note . In addition, for this question you should round the interest rates to the nearest hundredth of a percent (two decimal places)