Given the following information

Asset

1. $400, Duration = 6 years

2. $200, Duration = 2 years

Liabiliy

$500, Duration = 3 years

Equity $100

current interest rate is 10%

A) Calculate leverage adjusted duration gap for the whole balance sheet

B) Suppose interest rate increases 1% to 11% from 10%, calculate the impact of increasing 1% interest rate on net worth and the new balance sheet as a result of increasing interest rate.

C) Suppose a financial firm has convexity of the liability side is less than convexity of asset, suppose interest rate decreases 1%, what is the net impact of decreasing interest rate on net worth of the firm. Justify your answer.

Please answer all questions as throughly and as explanative as possible.