Titan Bank is a community bank and its balance sheet is reported below.[1] The total equity/total asset ratio is 10.00 percent ($10.00/$100.00) and is a very important ratio since bank regulators will shut down a bank when there is not enough capital. Assume bank regulators require the total equity/total asset ratio to be at least 8.00 percent at all times and if the ratio falls below 8.00 percent, a bank is immediately shut down.

Balance Sheet (as of 12/31/2019 and in millions)
Assets Assets have a duration of 4.24 years and a yield to maturity of 6.00%. Total Assets $100.00	Liabilities Liabilities have a duration of 1.03 years and a yield to maturity of 3.00%. Total Liabilities $90.00
	Equity Total Equity $10.00

Assume Federal Reserve actions force short-term rates to zero which creates an immediate non-parallel shift in the yield curve where short-term rates fall to zero, but intermediate-term rates fall very little. This means the yield to maturity on Titan Banks liabilities decreases 300 basis points from 3.00% to 0.00%, but the yield to maturity on Titans assets decrease only 10 basis points from 6.00% to 5.90%. Use Titans 12/31/20219 balance sheet to answer the following questions.

1. Would Titan Banks total assets increase or decrease in value?
2. Would Titan Banks total liabilities increase or decrease in value?
3. What is Titan Banks total equity/total asset ratio after interest rates fall? Show your equation with the numbers.
4. Will regulators shut down Titan Bank when the interest rates fall?

Increase or decrease in total assets
Increase or decrease in total liabilities
New total equity/total asset ratio
Show your equation with numbers
Is Titan Bank shut down (yes or no)