b) Bank EKM has the following balance sheet extract as of 30th June 2019 : The duration of the assets is Gyears and that of the customer deposits is 4years. The bank expects the interest rate to increase by 100 bps in the next 1year and is worried bout the impact on the bank's capital. i) Calculate the impact of the rate increase on the bank's capital (5 marks) ii) Prepare the bank's new balance sheet assuming the market rate does increase as predicted (5 marks) iii) Explain how EKM bank can immunize itself against interest rate risk (2 marks) iv) Identify and explain the challenges associated with the duration model (3 marks) b) Bank EKM has the following balance sheet extract as of 30th June 2019 : The duration of the assets is Gyears and that of the customer deposits is 4years. The bank expects the interest rate to increase by 100 bps in the next 1year and is worried bout the impact on the bank's capital. i) Calculate the impact of the rate increase on the bank's capital (5 marks) ii) Prepare the bank's new balance sheet assuming the market rate does increase as predicted (5 marks) iii) Explain how EKM bank can immunize itself against interest rate risk (2 marks) iv) Identify and explain the challenges associated with the duration model