Which of the following statements are true if Michonne’s analysis involves analyzing publicly available company financial statements, government data, and industry reports, and attempting to identify stocks of firms that are undervalued? Statement 1: There could be predictable benefits from Michonne’s analysis in markets that are not efficient. Statement 2: There could be predictable benefits from Michonne’s analysis in markets that are weak form efficient. Statement 3: There could be predictable benefits from Michonne’s analysis in markets that are semi-strong form efficient. Statement 4: There could be predictable benefits from Michonne’s analysis in markets that are strong form efficient.

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.