5. (30 points) This question is designed to inspire you to think about the effects of COVID19 on the management of a commercial bank. Suppose a bank's original T-account is de-picted as follows: Table 1: T-Account for Bank A in February 2020 The interest rate on loans is 8%, the average return for securities is 5%, the interest rate on reserves is 2%, the interest rate on deposits is 1%, the interest rate on borrowings is 1%. Please answer the following questions based on the information shown in Table 1. 1. Please calculate the equity value, capital ratio and the return on equity? 2. In March 2020, the financial risk becomes higher because of the outbreak of the COVID19.The bank decides to raise the loan rate to 12%. The return on securities declines to 5% because of the stock market crash. At the same time, the Federal Reserve lowered the interest rate on a commercial bank's borrowing to 0.5%. The interest rate on deposits and reserves are also lowered to 0.5%. With the new interest rates, what is the new return on equity if the balance sheet is still as described in Table 1 ? 3. The outbreak of COVID19 in March 2020 may affect the management of a com-mercial bank in the following ways. First, the value of securities decreases to $320 because the stock price plunged significantly. Second, $50 loans get defaulted be-cause the borrowers' financial situation deteriorates. Third, depositors needs to withdraw $200 dollars to maintain their living. With the above three changes, what is the new equity and capital ratio of the commercial bank? Explain whether the commercial bank is facing a higher or lower risk of going bankruptcy