A financial institution invests in a zero-coupon bond with a maturity (principal) value of $900,000 and a maturity of 2 years. The bond is partially funded through a liability with a current market value of $475,000 and has a duration of 3 years. The current market rate is 7% and interest rates are expected to increase by 1% in the future. Which of the following statements is true (round your answer to 2 decimals)?

Which one out of these 5

The current equity value of the position is $356,556.15 and if interest rates increase the equity value will increase.

The current equity value of the position is $425,000 and if interest rates increase the equity value will decrease.

The current equity value of the position is $311,094.86 and if interest rates increase the equity value will decrease.

The current equity value of the position is $311,094.86 and if interest rates increase the equity value will increase.

The current equity value of the position is $356,556.15 and if interest rates increase the equity value will decrease.