Assume that the First National Bank has the balance sheet shown below, the income gap is...

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Assume that the First National Bank has the balance sheet shown below, the income gap is currently -$17.5 million, and that interest rates are initially at 10%. Assets Reserves Securities 5,000,000 First National Bank Duration 0.00 Liabilities Checkable Deposits Duration 15,000,000 2.00 Money Market Deposits 5,000,000 0.10 < 1 Year 5,000,000 0.40 Savings Accounts 15,000,000 1.00 1 to 2 Years >2 years 5,000,000 1.60 10,000,000 7.00 CDs Variables-rate 10,000,000 0.50 Residential Mortgages < 1 Year 15,000,000 0.20 Variables-rate Fixed-rate 10,000,000 0.50 10,000,000 6.00 1 to 2 Years 5,000,000 1.20 >2 years 5,000,000 2.70 Commercial Loans Interbank Loans 5,000,000 0.00 < 1 Year 15,000,000 0.70 Borrowings 1 to 2 Years 10,000,000 1.40 < 1 Year 10,000,000 0.30 >2 years 25,000,000 4.00 1 to 2 Years 5,000,000 1.30 Buildings, etc. 5,000,000 0.00 >2 years 5,000,000 3.10 Bank Capital 5,000,000 Total $100,000,000 Total $100,000,000 1. Calculate the duration gap for the bank. Assume that the First National Bank has the balance sheet shown below, the income gap is currently -$17.5 million, and that interest rates are initially at 10%. Assets Reserves Securities 5,000,000 First National Bank Duration 0.00 Liabilities Checkable Deposits Duration 15,000,000 2.00 Money Market Deposits 5,000,000 0.10 < 1 Year 5,000,000 0.40 Savings Accounts 15,000,000 1.00 1 to 2 Years >2 years 5,000,000 1.60 10,000,000 7.00 CDs Variables-rate 10,000,000 0.50 Residential Mortgages < 1 Year 15,000,000 0.20 Variables-rate Fixed-rate 10,000,000 0.50 10,000,000 6.00 1 to 2 Years 5,000,000 1.20 >2 years 5,000,000 2.70 Commercial Loans Interbank Loans 5,000,000 0.00 < 1 Year 15,000,000 0.70 Borrowings 1 to 2 Years 10,000,000 1.40 < 1 Year 10,000,000 0.30 >2 years 25,000,000 4.00 1 to 2 Years 5,000,000 1.30 Buildings, etc. 5,000,000 0.00 >2 years 5,000,000 3.10 Bank Capital 5,000,000 Total $100,000,000 Total $100,000,000 1. Calculate the duration gap for the bank.