4. National Bank current balance sheet appears below. All assets and liabilities are currently priced at par and pay interest annually.

Assets	Amount ($ millions)	Annual Rate	Liabilities	Amount ($ millions)	Annual Rate
1-year bonds	$60	7%	1-year CD	$50	5%
10-year loan	$40	12%	2-year CD	$40	6%
			Equity	$10
Total	$100		Total	$100

a. What is the weighted average maturity of assets?

b. What is the weighted average maturity of liabilities?

c. What is market value of the ten-year loan if all market interest rates increase by 2

percent?

d. What is market value of the two-year CD if all market interest rates increase by 2

percent?

e.What is the impact on the FI's equity of a 2 percent overall increase in market

interest rates on all fixed-rate instruments? Briefly discuss your results.