6.(10) Assume that the average duration of a bank's assets is four years and the average duration of its liabilities is three years. Assume the bank has the following balance sheet. Assets Liabilities Checkable deposits $200 million Bank capital Total Liabs and Capital 50 million $250 million Total Assets $250 million a) If interest rates are expected to increase by 5 percentage points, say from 2% to 7%, what will be the effect on the net worth of First National? Answer: New value of total assets: New value of bank capital: b) Will the new capital level pose a concern to bank management when considering the capital/total asset ratio? Answer: Yes / No: Why