Answer the following questions: 1. Use the information in the table to answer the questions that follow. Cash $50 Deposit D. (3 years, 3%) $200 Loan Li (6 years, 5%) $200 Equity $50 Total Assets $250 Total Liabilities $250 a) Estimate the duration of Loan Li and Deposit D. b) Using the duration formula estimate the change in the value of the equity if interest rates are expected to increase by two percent. c) Estimate the convexity of Loan Li. d) Using the duration plus convexity formula estimate the change in the value of Loan Li if interest rates are expected to increase by two percent. (There is no need to estimate the convexity of deposit D..) Answer the following questions: 1. Use the information in the table to answer the questions that follow. Cash $50 Deposit D. (3 years, 3%) $200 Loan Li (6 years, 5%) $200 Equity $50 Total Assets $250 Total Liabilities $250 a) Estimate the duration of Loan Li and Deposit D. b) Using the duration formula estimate the change in the value of the equity if interest rates are expected to increase by two percent. c) Estimate the convexity of Loan Li. d) Using the duration plus convexity formula estimate the change in the value of Loan Li if interest rates are expected to increase by two percent. (There is no need to estimate the convexity of deposit D..)