A bank has the following balance sheet. The loans have a 1 -year maturity and earn 6.8% annually. The interest is paid once a year and the principal will not be repaid until maturity. The securities do not earn interest. The certificates of deposit (CDs) have a 4-year maturity. The bank must pay 4.5% on the CDs. a. What is the net interest income (NII) for the bank at the end of the first year? (4 points) b. Suppose that interest rates are expected to decrease by 40 basis points (0.4%) at the end of the first year. What will the NII be at the end of the second year? (4 points) c. If interest rates change as expected, the value of the bank's CDs will increase in value to $1,977,081. What will happen to the market value of the bank's equity? Why? (3 points)