Continental Bank holds assets and liabilities as follows:

Assets	Amount (million)	Duration		Liabilities	Amount (million)	Duration
Commercial loans	170	3.7		Deposits	280	0.80
Consumer loans	166	2.9		Certificates of deposit	180	1.60
Mortgage loans	270	9.2
Original interest rate = 3.75%				Original interest rate = 1.25%

1.The bank expects interest rates on assets and liabilities to rise to 4.25% and 1.75% respectively. What is the net change in net worth if the banks expectation on the interest rate change is correct? Show your calculations.

2.The bank would like to be immune from interest rate change; and it would like to maintain the duration of the liabilities. What is the target duration of the assets the bank should try to achieve?