You are the owner of Bank of Unity, which currently has the following balance sheet:

Assets	Liabilities
Reserves $3,600	Deposits $16,000
Loans $14,400	Bank Capital $2,000

Assume a 10% reserve requirement. If there is a sudden withdrawal of deposits of $2,400, what problem will your bank be facing as a result? Draw the new balance sheet (after the withdrawal) and be specific, including the extent (i.e. $ value) of your problem, for full credit.

Explain two (2) options available to you (as the bank owner) to deal with the resulting problem. What is typically the best option available to banks for dealing with this type of problem? Explain.

Assume that $14,400 of Bank of Unitys assets are interest-rate sensitive (i.e. variable interest rate), and that $16,000 of its liabilities are interest-rate sensitive (i.e. variable interest rate). Conduct a gap analysis for the bank, and show what will happen to bank profits if interest rates rise by 3 percentage points. Show your work and briefly explain.