Gunnison Insurance has reported the following balance sheet (in thousands):

All securities are selling at par equal to book value. The two-year notes are yielding 5 percent, and the 15-year munis are yielding 9 percent. The one-year commercial paper pays 4.5 percent, and the five-year notes pay 8 percent. All instruments pay interest annually.
a. What is the weighted-average maturity of the assets for Gunnison?
b. What is the weighted-average maturity of the liabilities for Gunnison?
c. What is the maturity gap for Gunnison?
d. What does your answer to part (c) imply about the interest rate exposure of Gunnison Insurance?
e. Calculate the values of all four securities on Gunnison Insurance's balance sheet  assuming that all interest rates increase 2 percent. What is the dollar change in the total asset and total liability values? What is the percentage change in these values?
f. What is the dollar impact on the market value of equity for Gunnison? What is the percentage change in the value of the equity?
g. What would be the impact on Gunnison's market value of equity if the liabilities paid interest semiannually instead of annually?

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Assets 2-year Treasury note 15-year munis Liabilities and Equity $135 160 45 $340 $175 l-year commercial paper 165 5-year note Equity Total liabilities and equity Total assets S340