Question 18 8 pts Consider the following balance sheet for a financial institution: Assets Liabilities and Equity Average duration (DJ) = Total Assets = $1000 Average duration (DA) = 8 years Total Liabilities = $600 3 years Total Equity = $400 a) What is the Fl's duration gap? b) What is the impact on the Fl's equity value if the relative change in interest rates is an increase of 2% (i.e., AR/(1+R) = .02). c) What is the Fl's expected Total Equity following the 2% increase in interest rates? This should be calculated, use correct units. d) Describe an appropriate hedge (using derivatives) for this type of risk. e) EXTRA CREDIT (1 point): Name a topic that another group (not your own!) presented during the last week of class