Use the following balance sheet information to answer this question.

a. What is the average duration of all the assets?

b. What is the average duration of all the liabilities?

c. What is the FI’s leverage- adjusted duration gap? What is the FI’s interest rate risk exposure?

d. If the entire yield curve shifted upward 0.5 percent (i. e., ∆R/(1 + R) = 0.0050), what is the impact on the FI’s market value of equity?

e. If the entire yield curve shifted downward 0.25 percent (i. e., ∆R/(1 + R ) = - 0.0025), what is the impact on the FI’s market value of equity?

Balance Sheet ($ thousands) and Duration (in years) Duration Amount T-bills $ 90 0.5 0.9 4.393 T-notes 55 T-bonds 176 2,724 2,092 Loans 7 Deposits Federal funds Equity 0.01 238 715