At the age of 16 marty contracted with cream-of-the-crop cycles to purchase a motorcycle. marty agreed to make monthly payments until the purchase price and interest are paid in full. if marty disaffirms the contract: marty must return the motorcycle if he is able. the contract is void and marty has no further obligation. the contract is now voidable by cream-of-the-crop cycles. marty will continue to be obligated on the contract until he reaches the age of majority.

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.