Question 14 (Mandatory) (10 points) RamBank's balance sheet is listed below. Market yields and durations (in years) are shown next to the amounts. Amounts are in millions. Assets Liabilities and Equity Yield Duration Yield Duration S 31 S 253 s Cash Fed funds 3-month T-bills s-year T-bonds 5-year munis 6-month consumer loans 5-year car loans 7-month C&I loans 2-year C&I loans Demand deposits $ 150 2.05% 0.02 Savings accounts 0.22 ? 4.25 0.42 3.78 0.55 1.65 50 0.50% $ s s $ $ 200 3.25% 250 6.50% 50 7.20% 250 5.00% 350 6.00% 200 4.80% 275 4.15% MMDAs (no minimum balance requirement) S $ $ S s s 3-month CDs 1-year CDs 5-year CDs Fed funds Repos 6-month commercial paper 460 3.50% 175 3.20% 375 3.50% 350 5.00% 225 2.00% 290 2.00% 300 4.05% 1.25 0.5 0.2 0.95 4.85 0.02 0.05 0.55 $ S 0.48 Fixed-rate mortgages (maturing in 5 months) Fixed-rate mortgages (maturing in 1 year) Fixed-rate mortgages (maturing in 5 years) Fixed-rate mortgages (maturing in 20 years) 450 5.10% Subordinate notes: S 300 6.85% 085 1-year fixed rate s 200 5.55% 0.92 S 275 5.30% 4.45 subordinated debt 18.25 7-year fixed rate Total liabilities Equity Total liabilities and equity S 355 5.40% s 100 6.25% 6.65 2,778 Premises and equipment S 20 $ 378 Total assets $ 3,156 S 3,156 The 8-year T-bonds have a $1,000 face value and pay a 1.20% coupon, semi- annually (-0.60% every six months), what is the duration of this bond? (Round your answer to two decimal points)