Consider the following balance sheet for Watchover Savings Inc. (in millions): (LG 22-1) Assets Liabilities and Equity Floating-rate Now deposits mortgages (currently (currently 10% p.a.) $ 60 6% p.a.) $105 30-year fixed-rate 5-year time loans deposits (currently 7% p.a.) 90 (currently 6% p.a.) 25 Equity 20 Total $150 Total $150

a. What is WatchoverU's expected net interest income at year-end?

b. What will be the net interest income at year-end if inter- est rates rise by 2 percent?

c. Using the one-year cumulative repricing gap model, what is the expected net interest income for a 2 percent increase in interest rates?