4) First National Bank has the following balance sheet:

- Total Assets: 100 million

- Rate-sensitive assets: 30 million

- Total liabilities: 90 million

- Rate-sensitive liabilities: 45 million

- Average duration of assets: 3 years

- Average duration of liabilities: 1.5 years

- Current profits: 5 million

Assume that the interest rate rises from 2 percent to 4 percent!

4a) What is the relative change in the banks profits? [Hint: Round to two decimal places!]

4b) What is the relative change in the banks net worth? [Hint: Round to two decimal places!]