QUESTION 3 Problem 2 The balance sheet of Capital Bank appears as follows: Assets Liabilities and Maturities Short Term Securities and Adjustable Rate Loans $220 Short Term and Floating Rate Funds 5560 Duration: 6 months Duration 6 months Fixed-Rate Loans Duration: 8 years. 700 Fixed-Rate Funds Duration: 30 months. 270 Nonearning Assets 80 Equity 170 Total Assets 51000 Total Liabilities and Net Worth $1000 Required: Calculate the duration gap of this bank. Assuming that the required rate of return is 8 percent. what would be the effect on the banks net worth if interest rates increased by 1 percent. Suppose that the expected change in net worth is unacceptable to management. What outcome could management take to reduce this change