(2) The financial position of Guaranteed Bank Ghana Ltd, an international competitive depository financial institution which was recently incorporated in Ghana to do banking business. The bank manager has asked for your assistance as a professional student to measure the interest rate exposure of the bank. Guaranteed Bank Ghana Financial Positions as at 31st December 2015 ASSETS GH LIABILITIES GH Million million Cash: Deposits: Reserves Demand Deposits 5 with BoG 5 Money Market Securities: Deposits 5 1year 5 Savings Deposit 15 1 to 2 years 5 Certificate of Deposits: Greater than 2years 10 Variable rate 10 Residential Mortgages: 1year 15 Variable-rate 10 1 to 2 years 5 Fixed rate (30years) 10 Greater than 2years 5 Government Funds 5 Commercial Loans: Borrowings: 1year 15 1year 10 1 to 2 years 10 1 to 2year 5 Greater than 2years 25 Greater than 2years 5 Fixed assets 5 Bank capital 5 100 100 Required: Using gap analysis, calculate and interpret the interest rate exposure for the following categories of assets and liabilities if the % change in income for each maturity bucket, if interest rates rise by 1%. (i) One-year assets and liabilities (ii) One -to- two years assets and liabilities (iii) Variable-rate assets and liabilities Suppose an economic boom has cause a reduction in the interest rate by 0.5%, how will this affect the (iv) One year and (v) One -to- two years assets and liabilities