Consider the following. a. Calculate the leverage-adjusted duration gap of an FI that has assets of $2.4 million invested in 25-year, 9 percent semiannual coupon Treasury bonds selling at par and whose duration has been estimated at 10.08 years. It has liabilities of $1,040,000 financed through a two-year, 6.50 percent semiannual coupon note selling at par.

b. What is the impact on equity values if all interest rates fall 20 basis pointsthat is, R/(1 + R/2) = 0.0020?