4. Consider the balance sheet of First Bank of Woebegone (FBW), a rather local bank: ASSETS LIABILITIES AND CAPITAL 45 checking deposits, 0.1% annual interest 25 Reserve account at the Federal Reserve Interest may change every 6 weeks at FOMC meetings 315 Auto loans, interest rate Changes yearly based on LIBOR 145 Credit card loans, Interest rate based on 1-Year US, Treasury Note, adjusted every 4 months 800 Home mortgage loans, rates Adjusted semi-annually based on 10-year Treasury bond 50 Bank premises 170 money market deposits, interest changes monthly 780 Nine-month time deposits, interest rate fixed during the nine months 210 Loans from other banks, rates based on Prime Rate, changes weekly 195 Capital a) What is the gap between FBW's rate-sensitive assets and liabilities at 7 months maturity? b) What is the gap between FBW's rate-sensitive assets and liabilities at 14 months maturity? c) How much would FBW's net income change if all interest rates rose 3 percentage points 14 months from now? 4. Consider the balance sheet of First Bank of Woebegone (FBW), a rather local bank: ASSETS LIABILITIES AND CAPITAL 45 checking deposits, 0.1% annual interest 25 Reserve account at the Federal Reserve Interest may change every 6 weeks at FOMC meetings 315 Auto loans, interest rate Changes yearly based on LIBOR 145 Credit card loans, Interest rate based on 1-Year US, Treasury Note, adjusted every 4 months 800 Home mortgage loans, rates Adjusted semi-annually based on 10-year Treasury bond 50 Bank premises 170 money market deposits, interest changes monthly 780 Nine-month time deposits, interest rate fixed during the nine months 210 Loans from other banks, rates based on Prime Rate, changes weekly 195 Capital a) What is the gap between FBW's rate-sensitive assets and liabilities at 7 months maturity? b) What is the gap between FBW's rate-sensitive assets and liabilities at 14 months maturity? c) How much would FBW's net income change if all interest rates rose 3 percentage points 14 months from now