The average duration of the loans is 13 years. The average duration of the deposits is 3 years.

Consumer loans: $50 million Depostis $235 million

Commercial Loans $200 million Equity $15 million

Total Assets $250 million Total Liabilities and Equity $250 million

a) Based on the above information, what is the leveraged-adjusted duration gap of the bank's portfolio?

b) What is the change in the value of the FI's equity for a 1 percent increase in interest rates from the current rates of 10 percent ?

PLEASE SHOW CALCULATIONS