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Suppose again that Melvin's Bank starts with the balance sheet in given Table. Then the bank sells $10 of loans for $10 of cash.

a. What is the immediate effect on the balance sheet?

b. After the loan sale, what additional transactions is the bank likely to make? What will the balance sheet look like after these transactions?

1670_Figure- Liquidity Risk at Melvins Bank.jpg

Financial Management, Finance

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