Question 4 (12 marks) The current spot rates are given for ABC Inc.. Assume that all interest rates are fixed and paid annually. Assets 1-year loan rate: 7.50 percent 2-year loan rate: 8.15 percent Liabilities 1-year CD rate: 6.50 percent 2-year CD rate: 6.65 percent a. Determine the duration of the two-year loan (per $100 face value) if it is selling at par. b. If the FI finances a $1,000,000 2-year loan with a $800,000 1-year CD and equity, compute the leveraged adjusted duration gap of this position. Question 4 (12 marks) The current spot rates are given for ABC Inc.. Assume that all interest rates are fixed and paid annually. Assets 1-year loan rate: 7.50 percent 2-year loan rate: 8.15 percent Liabilities 1-year CD rate: 6.50 percent 2-year CD rate: 6.65 percent a. Determine the duration of the two-year loan (per $100 face value) if it is selling at par. b. If the FI finances a $1,000,000 2-year loan with a $800,000 1-year CD and equity, compute the leveraged adjusted duration gap of this position