Assignment 1 1- A bank has two, 3-year commercial loans with a present value of $50 million. The first is a $30 million loan that requires a single payment of $37.8 million in 3 years, with no other payments until then. The second is for $20 million. It requires an annual interest payment of $1.6 million. The principal of $20 million is due in 3 years. a. Using excel calculate the duration the duration of the bank's commercial loan portfolio interest rates is 9%? b. What will happen to the value of its portfolio if the general level of interest rates increased from 9% to 9.5%? 2- Using excel calculate the duration of a Twenty-year bond with a face value of $1,000 and a coupon rate of 11%. Assume that the current interest rates are 9%. What will your answer be if the current interest rates fall to 8%? Show all your calculations. 3- Using the data provided in the previous problem, calculate the percentage change in price difference using the duration formula