Depository institutions provide four benefits, which are . A. creating liquidity, lowering the cost of borrowing, paying interest on investment funds, and introducing new technology into banking B. pooling risk, keeping inflation low and steady, lowering the cost of borrowing, and lowering the cost of monitoring borrowers C. creating liquidity, lowering the cost of borrowing, lowering the cost of monitoring borrowers, and pooling risk D. minimizing interest rates on purchases of large ticket items, centralizing all household monetary needs in one location, introducing new technology into banking, and paying interest on investment funds

Explain how can you avoid conflict by adjusting

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.

Under t, the point (0,2) gets mapped to (3,0). t-1 (x,y) →