Noor Bank finds that its assets have an average duration of 3 years and its liabilities have an average duration of 3.8 years. The ratio of assets to liabilities is 1.25. Assume that the total assets of the bank equal to $ 100 million. If interest rates are expected to increase by 2% from its current level of 6% during the next three months,

1. What would be the impact on the banks net worth?

Estimate the new value of bank equity.