b$.$ Suppose the bank total asset is GH$10$Millions, its duration is $6$years and the Green

bond represent the total liabilities of the bank while the capitalization shows the

equity position of the bank. Take the duration of the liability as determined in $($iii$)$

and the changes in interest rate as stated in $($v$).$

i$.$ Determine the norminal change in the equity position of the bank as a result

of an increase in interest rates?

ii$.$ What is the percentage gain$/$loss in the equity position of the bank?

iii. Based on your answers in $($i$)$ and $($ii$),$ should the bank shareholders increase

or decrease their equity position? Is the bank a strong bank or weak bank?

iv$.$ Suppose assets of the bank rise by $3\%$ and liabilities decrease by $1\mathrm{.}5\%,$ What

advise will you have for management of the bank regarding managing the

assets and liabilities of this bank?