3. Find Gap and Gap Ratio of Bank A from the balance sheet on the next page. Based on Gap and Gap Ratio, explain how changes in market interest rates (both up and down) would affect the bank's net interest margin. [10 points] $ 800 $ 9,000 $10,000 Liabilities and capital $ 1,200 Demand deposits NOW accounts MMDAS CDs $14,000 Short-term $9,000 $ 5,000 From 1 to 5 years $5,000 Total Federal funds Long-term bonds $ 7,000 CAPITAL $ 14,000 $ 500 $ 400 $ 1,200 Unit: Millions of Dollars Assets Required reserves Commercial loans Floating-rate $ 2,000 Fixed-rate $ 12,000 Total Consumer loans Mortgages Floating-rate $ 5,000 Fixed-rate $ 2,000 Total Treasury securities Short-term $ 500 Long-term $ 2,000 Total Long-term corporate securities High-rated $ 1,000 Moderate-rated $2,000 Total Long-term municipal securities High-rated $1,000 Moderate-rated $ 1,700 Total Fixed assets TOTAL ASSETS $ 2,500 $ 3,000 $ 2,700 $ 500 $ 35,900 TOTAL LIABILITIES AND CAPITAL $ 35,900