Reading Financial Institutions Management: A Risk Management Approach (9th Edition) by Anthony Saunders and Marcia Millon Cornett, Chapter 8 and 9. Assignment Please provide adequate explanation to support your answers. Unless otherwise men- tioned, all quoted yields, interest rates and coupon rates are annualized. 1. (Repricing gaps) Consider a financial institution with the following Balance Sheet (amounts are in million; market yields are in parenthesis) Assets Liability and Equity Cash $20 1-month commercial papers $340 1-month T-bills (5.05%) 2007-year debt, fixed rate (6.55%) 300 3-month T-bills (5.25%) 100 2-year T-notes (5.50%) 100 8-year T-notes (6.95%) 200 20-year mortgage (floating rate, rate reset every 6 months) 50 Equity 30 Total Assets $670 Total Liability and Equity $670 (a) What is the cumulative repricing gap for 30 days (CGAP 30-day), for 3 months (CGAP 3-month) and for 2 years (CGAP2-year); (b) What is the impact over the next three months on the net interest income if interest rate on RSAs and RSLs both increase by 50 basis points (i.e. +0.5%)? (c) What is the impact over the next two years on the net interest income if interest rate on RSAs increases by 60 basis points and on RSLs increases by 50 basis points