1. A bank has $100M in assets, which are funded with $93M of deposits. The bank has no other liabilities. What is its capital as a percentage of assets (expressed as %).

2. Assume that investors expect inflation of 3% over the next five years. If the required return on a five year Treasury bond is 2.15%, what is the coupon on a newly issued par value 5 year Treasury? (expressed as %).

3. The current one year Treasury rate is 3%. People expect the Fed to raise rates a year from now by 1%, by another 1% the year after and then to stay there for the next year. What should the rate on a four year note be? (answer to the nearest basis point)

4. Calculate the duration of a 3 year bond that has a YTM of 2.75% and a coupon of 5%.