1. Assume that the average duration of its assets is 2.5 years, while the average duration of its liabilities is 0.8 years. According to the duration gap model, what size of interest rate change will make the bank insolvent if rates are currently 3%?

   		A decline of 5.25%
   		A decline of 4.85%
   		An increase of 4.67%
   		An increase of 3.98%