Consider a simple credit union with $20 million in equity. The assets are $100 million in 5 year "mortgages" at 5%. The liabilities are $80-x million borrowed from depositors on 1 month deposits (rate 1%), with X million dollars borrowed from depositors on 5 year GICs (rate 3%). Take X to move between 0 and $80 million dollars. While unrealistic, to keep the algebra simple assume all loans are zero coupon: so a 100,000 mortgage involves repaying 100,000 * exp(5*0.05) in 5 years time, a 10,000 GIC returns 10,000*exp(5*0.03) in 5 years time, etc. Also assume no credit risk in the mortgages. For X = 0, 40 million, and 80 million, respectively, work out the return on the common equity and the impact to the bank of a 1% parallel shift increase in the yield curve. a) Consider a simple credit union with $20 million in equity. The assets are $100 million in 5 year "mortgages" at 5%. The liabilities are $80-x million borrowed from depositors on 1 month deposits (rate 1%), with X million dollars borrowed from depositors on 5 year GICs (rate 3%). Take X to move between 0 and $80 million dollars. While unrealistic, to keep the algebra simple assume all loans are zero coupon: so a 100,000 mortgage involves repaying 100,000 * exp(5*0.05) in 5 years time, a 10,000 GIC returns 10,000*exp(5*0.03) in 5 years time, etc. Also assume no credit risk in the mortgages. For X = 0, 40 million, and 80 million, respectively, work out the return on the common equity and the impact to the bank of a 1% parallel shift increase in the yield curve. a)