Assets		Liabilities
Reserves	250	Deposits
Required	__	Transaction (checking) deposits	1000
Excess	__	Savings deposits	3000
Loans		Money Market deposits	500
Variable rate loans	750	Time deposits (CDs)
Short-term loans	1600	Fixed rate	500
Long-term fixed rate loans	2000	Variable rate	100
Securities		Borrowing
Short-term securities	500	Fed funds borrowed	0
Long-term securities	600

Please refer to the bank balance sheet above for question 1a, 1b, 1c, and 1d, thank you (please solve step by step).

1a) Suppose return on assets (ROA) is 1.2%. Suppose bank owners convince bank managers to borrow 1000 million from other banks and make more loans. Assuming no change in ROA, What is the new value for ROE? Answer as a percent and do not enter a % sign.

1b) Suppose values are in millions of dollars. Suppose return on assets (ROA) is 1.2%. Suppose bank owners convince bank managers to borrow 1000 million from other banks and make more loans. What is a negative consequence of doing this? Please select one from the following list of 4:

- risk of insolvency increases

- none, there are no negative consequences

- return on equity decreases

- return on assets increases

1c) Calculate the value of rate-sensitive assets. Answer in millions of dollars and do not enter a $ sign.

1d) Calculate the value of rate-sensitive liabilities. Answer in millions of dollars and do not enter a $ sign.