1. Calculate the leverage-adjusted duration gap of an Fl that has assets of $1.2 million invested in 25-year, 10 percent semiannual coupon Treasury bonds selling at par and whose duration has been estimated at 9.96 years. It has liabilities of $920,000 financed through a two-year, 7.00 percent semiannual coupon note selling at par.

What is the impact on equity values if all interest rates fall 20 basis points--that is, AR/(1 + R/2) = -0.0020?

(For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))