bank's net interest income be affected (a) given its current balance sheet makeup and (b) reflecting its weighted balance sheet adjusted for the foregoing rate-sensitivity indexes? e cel 10. Sparkle Savings Association has interest-sensitive assets of $400 million, interest sensitive liabilities of $325 million, and total assets of $500 million. What is the bank's dollar interest-sensitive gap? What is Sparkle's relative interest-sensitive gap? What is the value of its interest sensitivity ratio? Is it asset sensitive or liability sensi- tive? Under what scenario for market interest rates will Sparkle experience a gain irn net interest income? A loss in net interest income? e cel 11. Snowman Bank, N.A., has a portfolio of loans and securities expected to generate cash inflows for the bank as follows: Expected Cash Inflows of Principal and Interest Payments Annual Period in Which Cash Receipts Are Expected Current year Two years from today Three years from today Four years from today Five years from today $1,275,600 746,872 341,555 62,482 9,871 Deposits and money market borrowings are expected to require the following cash Expected Cash Outflows of Principal and Interest Payments Annual Period during Which Cash Payments Must Be Made Current year Two years from today Three years from today Four years from today Five years from today $1,295,500 831,454 123,897 1,005 If the discount rate applicable to the previous cash flows is 4.25 percent, what is the duration of Snowman's portfolio of earning assets and of its deposits and money mar ket borrowings? What will happen to the bank's total returns, assuming all other fac tors are held constant, if interest rates rise? If interest rates fall? Given the size of the duration gap you have calculated, in what type of hedging should Snowman engage? Please be specific about the hedging transactions needed and their expected effects