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Please show working. The manager for Smith and Trust has the following assets and liabilities to manage: Asset Bonds Consumer Loans Commercial Loans Value (millions)

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The manager for Smith and Trust has the following assets and liabilities to manage: Asset Bonds Consumer Loans Commercial Loans Value (millions) 65 875 725 Duration 8.5 2 5 Liability Value (millions) Demand Deposits 275 Savings ?? a. What is the asset duration? Duration 1.25 0.5 b. If the firm wants a duration gap of 3.1 what level of savings should the bank try to achieve? The manager for Smith and Trust has the following assets and liabilities to manage: Asset Bonds Consumer Loans Commercial Loans Value (millions) 65 875 725 Duration 8.5 2 5 Liability Value (millions) Demand Deposits 275 Savings ?? a. What is the asset duration? Duration 1.25 0.5 b. If the firm wants a duration gap of 3.1 what level of savings should the bank try to achieve

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