"The Australian Prudential Regulation Authority (APRA) requires banks to summarise and report on the extent of interest rate risk that they face. For the 'banking book', this is measured as the expected change in economic value from a 200 basis point increase in interest rates at all maturities. ... The major banks are required to hold sufficient capital to protect themselves against the adverse impact of higher interest rates on their future profitability, to mitigate the risk of losses in the event of stress."https://www.rba.gov.au/publications/fsr/2018/apr/pdf/box-c.pdf

a) Evaluate how Rainy Bank is performing according to the above mentioned APRA criteria. Assume that the average interest rate level is currently 1%.

Rainy Bank (in million AUD) Assets Liabilities and Equity Cash and ESF $10 Demand deposits (Duration 0) $60 Securities (Duration 5) $50 Wholesale funding (Duration 2) $40 Loans (Duration 10) $50 Equity $10