A bank's balance sheet is as follows: (NIM): 1.125%

Item	Value	Yield	D	Item	Value	Yield	D
Cash	$200	0%	0	Time deposits	$800	10%	1
Commercial loan	900	14%	2	CD	700	11%	2
T-bond	700	7%	5	Net worth	???

Calculate the duration of the bank's liabilities: D(L)

4.467

3.467

2.467

1.467

Calculate the bank's duration gap: D(GAP), making sure that you account for the adjustment factor.

		1.0
		2.944 years
		1.467 years
		1.72 years