7 A bank with a two your horizon has issued a one you certificate of deposit for $80 million at an interest rate of 2 percent. With tho, proceeds, the bank has purchased a two year Treasury note that pays 4 percent interest Whatrik does the bank face in entoring into these transaction? Instructions: Enter numeric responses as whole dollar values. The bank faces the risk that the short term interest rate will tick to select before the second year. Click to select the amount of Interest the bank has to pay on the CD, but leaving the interest income that the bank receives from the Treasury note unchanged. With on interest rate of 2 percent for the CD and 4 percent for the Treasury note, the banks annual interest income is 5 million and the bank's annual interest expenses are $ million. The bank makes a profit of $ million What would happen if interest rates were to rise by 1 percent? if the interest rate risos 1 percent, the bank's profit in the second year fails to SD million