Question 2 (15 marks) Assume that Western Bank has the following balance sheet (in millions): Assets $ Liabilities and equity $ Cash 80 1-year term deposits (currently 100 3% annually) 80 130 Variable-rate mortgage loan (currently 4.5% annually) 2-year variable-rate deposits (currently 3.5% annually) 320 150 10-year fixed-rate loans (currently 3.8% annually) 3-year fixed-rate deposits (currently 3.8% annually) 180 220 3-year personal loan (6% repriced every year) 4-year deposit (4%, repriced every 2 years) 250 Ordinary Equity 250 6-year personal loan (6.5%, repriced every 3 years) Inventories 40 Retained Earnings 100 Total assets 950 Total liabilities and equity 950 (a) What is Western Bank's expected net interest income at year-end? (6 marks) (b) What is the net interest income at year-end if interest rates increase by 50 basis point? What can you conclude from the result? (6 marks) (c) What is Western Bank's change in net interest income using repricing model based on the interest rates increase by 50 basis point