SHOW THE WORK a$)$ Find leverage$-$adjusted duration gap. Give management interpretation of duration gap. $[$Hint:

Page # $244]$

b$)$ Suppose interest rates on both assets and liabilities rise from $5\%$ to $9\%.$ Then, what will be

change in institution's net worth?

c$)$ Suppose interest rates on both assets and liabilities fall from $15\%$ to $7\%.$ Then, what will be

change in institution's net worth?