Tom and mindy want to keep $420,000 in cash equivalents that are federally insured. they could accomplish this by a. investing $170,000 in a money market mutual fund and $250,000 in a federally insured credit union. b. dividing it equally into two different joint accounts in two different federally insured savings banks. c. putting $75,000 in two joint accounts in different branches of the same bank. d. dividing it equally into three different joint accounts in the same federally insured bank.

Variable rate cd’s = $90 treasury bills = $150 discount loans = $20 treasury notes = $100 fixed rate cds = $160 money market deposit accts. = $140 savings deposits = $90 fed funds borrowing = $40 variable rate mortgage loans $140 demand deposits = $40 primary reserves = $50 fixed rate loans = $210 fed funds lending = $50 equity capital = $120 a. develop a balance sheet from the above data. be sure to divide your balance sheet into rate-sensitive assets and liabilities as we did in class and in the examples. b. perform a standard gap analysis and a duration analysis using the above data if you have a 1.15% decrease in interest rates and an average duration of assets of 5.4 years and an average duration of liabilities of 3.8 years. c. indicate if this bank will remain solvent after the valuation changes. if so, indicate the new level of equity capital after the valuation changes. if not, indicate the amount of the shortage in equity capital.