QUESTION ONE a. Discuss how asymmetric information problems can lead to a bank run. (25 Marks) b. Consider the following extracts from the balance sheet of JCB Bank (values are in millions): Value Mortgage Loans 4000 Other investments 3200 Cash 1000 Deposits 6500 Long-term debt 2000 Fixed assets 1500 i. Assuming that asset duration is 3.2433 years and liability duration is 1.0972 years, determine the duration gap for JCB Bank. Explain your answer. (15 Marks) ii. Determine the change in the market value of equity as a percentage of assets if interest rates decrease from 5.5% to 4.5%. Explain your answer. (10 Marks)