Refer to the following information about ABC Bank for the questions 1-3.

The starting average interest rate (on assets and liabilities): 5%

	Market Value (million)	Duration
Total Assets	$50	9.0
Total Liabilities	$40	3.0

1. If interest rates grow by 1 percentage point, what is the resulting percentage change in assets value for ABC Bank?

1. 8.57%
2. -8.57%
3. 5.71%
4. -5.71%
5. None of the above

2. The duration gap adjusted to leverage equals:
   1. -6.6
   2. 6.0
   3. 7.7
   4. 10
   5. None of the above

3. If interest rates grow by 1 percentage point, what is the resulting market value change in the bank's equity?
   1. -6.27
   2. -6.58
   3. 6.58
   4. 7.67
   5. 7.30
   6. None of the above