Help answer the question below.

A bank with a twoyear horizon has issued a oneyear certificate of deposit for $80 million at an interest rate of4 percent. With the proceeds, the bank has purchased a two-year Treasury note that pays 6 percent interest. What risk does the bank face in entering into these transactions? Instructions: Enter numeric responses as whole dollar values. The bank faces the risk that the shortterm interest rate will (Click to select) v before the second year, (Click to select) v the amount of interest the bank has to pay on the CD, but leaving the interest income that the bank receives from the Treasury note unchanged. With an interest rate of4 percent for the CD and 6 percent for the Treasury note, the bank's annual interest income is $ U and the bank's annual interest expenses are $ U . The bank makes a profit of$ ' U What would happen if all interest rates were to rise by1 percent? If the interest rate rises 1 percent, the bank's profit in the second year falls to $ :|