6. What do you know about the special role of the Federal Reserve Bank of New York?

7. If interest rates rise by 5 percentage points for the First National Bank, say, from 10 to 15%, bank profits (measured using gap analysis) will

	Assets	Liabilities
Rate-sensitive	$20 million	$50 million
Fixed-rate	$80 million	$50 million

A) decline by $0.5 million.

B) decline by $1.5 million.

C) decline by $2.5 million.

D) increase by $1.5 million.

Please choose from the above and explain your reasoning.

8. Why do equity holder care more about ROE than ROA?

9.what are the general principles of bank management?

10. What are the three theories that have been put forward to explain the term structure of interest rates, please brefly specify the content of the three theories.