From the following information, if interest rates rise by 5 percentage points, then bank profits (measured using gap analysis) will

	Assets	Liabilities
Rate-Sensitive	$40 m	$50 m
Fixed Rate	$60 m	$40 m

a) decline by $1.5 million.

b) decline by $0.5 million.

c) decline by $2.5 million.

d) increase by $2.0 million.

Please explain how you got your answer.