Jeanne owns a manufacturing business. Recently, Jeanne learns of a new technology that will support her business’s production process. However, the technology is brand new as well as expensive. Jeanne has decided not to make such a big investment right away even though she can. Instead, she plans to wait for a few months or a year, get feedback about the technology from other sources, and then consider making the purchase. Which of these factors has affected Jeanne’s purchase decisions the most? A. government policies B. changing market trends C. long-term business objectives D. low-risk appetite E. lack of funds

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.