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Question 5 25 out of 25 points Bear Bank has the following assets and liabilities as of year-end. All assets and liabilities are currently priced at par and pay interest annually: Assets Amount ($ Annual Liabilities Amount ($ Annual millions) millions) 2-year $40 3-year CD $60 7% rate rate 8% loans 3-year $60 8% 5-year term $30 6% loans deposit Equity $10 Total $100 Total $100 What is Bear Bank's maturity gap? What is the effect on the value of the FI's equity if interest rates decrease by 1 percent? Selected Answer: MGAP = -1.07 years Equity if interest rates decrease by 1% = - $604,853 Correct Answer: [None Question 5 25 out of 25 points Bear Bank has the following assets and liabilities as of year-end. All assets and liabilities are currently priced at par and pay interest annually: Assets Amount ($ Annual Liabilities Amount ($ Annual millions) millions) 2-year $40 3-year CD $60 7% rate rate 8% loans 3-year $60 8% 5-year term $30 6% loans deposit Equity $10 Total $100 Total $100 What is Bear Bank's maturity gap? What is the effect on the value of the FI's equity if interest rates decrease by 1 percent? Selected Answer: MGAP = -1.07 years Equity if interest rates decrease by 1% = - $604,853 Correct Answer: [None