Assume that total assets are 1,000 rate sensitive assets are 500 and rate sensitive liabilities are 700. Net worth is 80. All data are in millions of dollars. According to the gap (repricing) model, what will happen to net income if interest rates increase by two percentage points?

a. it will increase by two percent

b. it will decrease by two percent

c. it will increase by $4 million

d. it will decrease by $4 million

e. cannot determine without more information