1- Please use the information for this question and the following.

A- A bank is considering two securities: a 30-year Treasury bond yielding 7% and a 30-year municipal bond yielding 5%. If the bank's tax rate is 30%, what is the tax-equivalent yield of the municipal bond? Please express as a %.

B- Which bond gives the investor a better tax-equivalent yield?

2- Please use the information in this question for the next four questions, including this one. Below is the balance sheet First National Bank. (all numbers are in $s)

A- Please calculate the dollar value of FNB's earning assets.

B- Please calculate the ROA for FNB. The income statement is below. Please express as a %.

C- Please calculate FNB's asset utilization ratio. Please express as a %.

D- Please calculate FNB's spread.

Assets Liabilities and Equity Cash 450 Demand Deps 5,510 Demand Deps at other banks 1,350 Small Time Deps 10,800 Investments 4,050 Jumbo CDs 3,200 Fed Funds Sold 2,025 Fed Funds Purchased 2,250 Loans 15,525 Equity 2,200 Reserve for Loan Losses (1,125) Premises 1,685 Total Assets 23,960 Total L+E 23,960 Interest Income 2,600 Interest Expense 1,650 Provision for Loan Losses 180 Non-interest Income 140 Non-interest expense 420 Taxes 90Assets un Rate Earned Liabs + Equity S Rate Paid Cash and due 6,000 O Demand Deposits 9,000 O Investments 22,000 8 NOW accts 69,000 5 Repo. Agrmts 12,000 6 Retail CDs 18,000 7 Loans less ALLL 80,000 10 Sub. Debt 14,000 8 Fixed Assets 10,000 NA Total Equity 24,000 na Other Earning Assets 4,000 9 Total Assets 134,000 Total L+E 134,000Cash Investments Repo Agrees Loans Fixed Assets Other Assets Total Assets Total Interest Income 20,000 Total Interest Expense 11,000 Net Interest Income 9,000 Provision for Loan Losses 2,000 Non-interest income 2,000 Non-interest expense 1,000 Income before taxes 8,000 Taxes 3,000 Net Income 5,000