In assessing the validity of a court decision, discuss the significance of the following: a. The decision was rendered by the U. S. District Court of Utah. Taxpayer lives in Utah. b. The decision was rendered by the U. S. Court of Federal Claims. Taxpayer lives in Utah. c. The decision was rendered by the Second Circuit Court of Appeals. Taxpayer lives in California. d. The decision was rendered by the U. S. Supreme Court. e. The decision was rendered by the U. S. Tax Court. The IRS has acquiesced in the result. f. Same as part (e), except that the IRS has issued a nonacquiescence as to the result.

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.