You are the CEO of bank A. The bank balance sheet is as follows (numbers in millions of $): Assets Liabilities Cash 30 T-bills 175 Loans 245 Deposits 250 Euro CDs 130 Capital 70 450 450 a) (6 points) Suppose a 10% reserve requirement is imposed by the Central Bank. Are the reserves of Bank A enough to meet the Central Bank's requirement? If yes, show why. If not, suggest a possible trade. b) (4 points) Compute the financing gap of bank A. c) (5 points) Suppose that Bank A receives deposits from clients for $80 million. After receiving them, it invests $65 million in T-bills. Show the resulting balance sheet. d) (7 points) Ignore point c), i.e. Bank A's balance sheet is still the initial one: Assets Liabilities Cash 30 T-bills 175 Loans 245 450 Deposits Euro CDs Capital 250 130 70 450 Due to a sudden deterioration in economic conditions, you realize that $145 million loans are indeed worth only $80 million. You decide to get rid of these non-performing loans by forming a Bad Bank, and retain the proceeds of the sale as cash. Show the Good Bank balance sheet after the loan sale. You are the CEO of bank A. The bank balance sheet is as follows (numbers in millions of $): Assets Liabilities Cash 30 T-bills 175 Loans 245 Deposits 250 Euro CDs 130 Capital 70 450 450 a) (6 points) Suppose a 10% reserve requirement is imposed by the Central Bank. Are the reserves of Bank A enough to meet the Central Bank's requirement? If yes, show why. If not, suggest a possible trade. b) (4 points) Compute the financing gap of bank A. c) (5 points) Suppose that Bank A receives deposits from clients for $80 million. After receiving them, it invests $65 million in T-bills. Show the resulting balance sheet. d) (7 points) Ignore point c), i.e. Bank A's balance sheet is still the initial one: Assets Liabilities Cash 30 T-bills 175 Loans 245 450 Deposits Euro CDs Capital 250 130 70 450 Due to a sudden deterioration in economic conditions, you realize that $145 million loans are indeed worth only $80 million. You decide to get rid of these non-performing loans by forming a Bad Bank, and retain the proceeds of the sale as cash. Show the Good Bank balance sheet after the loan sale