1. Assume you are the manager of a bank with the balance sheet as shown below. Determine the SGAP for the bank. How much will pre tax net income change if interest rates go up 1%? Down 1%? Assets Liabilities and Equity Capital $10M Cash assets Short-term investments (D = 0.35 years) $15M $30M Demand deposits Interest-bearing deposits maturing in less than 1 year (D - 0.40 years) Interest-bearing deposits maturing in more than 1 year (D = 2.5 years) $10M Long-term investmonts (D = 5.00 years) $5M $45M Loans maturing in less than 1 year (D = 0.5 years) $25M Borrowed funds (D = 0.25 years) Equity capital $5M 10M Loans maturing in more than 1 year (D = 10.0 years) Total assets $5M $80M Total liabilities and equity capital $80M