Argue conceptually whether you agree or disagree, using reference to the relationships expressed in the numbers/data provided concerning the banks financial statements, with each of the next statements. Assume all else stays the same for each statement. Answers may take the form of a sentence or two, but no larger than a simple paragraph. Do you agree or disagree with the statement, and most importantly, why?

1.Shifting $1 billion from T-bills to make small business loans will raise ROA and would increase (improve) its liquidity position.

2.The bank will replace $200 million in five-year NCDs with a variable rate preferred stock issue based on the 1-year NCD rate + 2%. This change in Capital will reduce ROA but increase ROE.