1- A bank has two, 3-year commercial loans with a present value of $50 million. The first is a $30 million loan that requires a single payment of $37.8 million in 3 years, with no other payments until then. The second is for $20 million. It requires an annual interest payment of $1.6 million. The principal of $20 million is due in 3 years.

a. Using excel calculate the duration the duration of the banks commercial loan portfolio interest rates is 9%?

b. What will happen to the value of its portfolio if the general level of interest rates increased from 9% to 9.5%?