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could you also explain how to find these given answers thank you Consider the following two banks: Bank 1 has assets composed solely of a

image text in transcribedcould you also explain how to find these given answers thank you

Consider the following two banks: Bank 1 has assets composed solely of a 10-year, 12 percent coupon, $1 million loan with a 12 percent yield to maturity. It is financed with a 10-year, 10 percent coupon, $1 million CD with a 10 percent yield to maturity. Bank 2 has assets composed solely of a 7-year, 12 percent, zero-coupon bond with a current value of $894,006.20 and a maturity value of $1,976,362.88. It is financed by a 10-year, 8.275 percent coupon, $1,000,000 face value CD with a yield to maturity of 10 percent. All securities except the zero-coupon bond pay interest annually. a. If interest rates rise by 1 percent (100 basis points), what is the difference in the value of the assets and liabilities of each bank? (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16)) & Answer is complete but not entirely correct. Asset Value After Interest Rise $ 945,737.57 $ 839,518.43 Before Interest Rise $ 1,000,000.00 $ 894,006.22 Bank 1 Liabilities Value After Interest Rise $ 945,737.57 X $ $ 840,151.86 $ Before Interest Difference Rise (54,262.43) $ 1,000,000.00 (54,487.79) X $ 894,006.22 $ $ Difference (54,262.43) (53,854.36) X Bank 2

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