The bank's manager thinks rates will increase by 0.50 percent in the next 3 months. To hedge this interest risk the manager will use June T-bond futures contract.The T-bonds underlying the futures contract have a maturity=15 years a duration=14.25 years, and a price=108-10 or $108,312.50.Assume that interest rate changes in the futures market relative to the cash market are such br=0.885

1)calculate the leverage adjusted duration gap (DGAP)for Bank One.

2)using the DGAP model,if interest rates on assets and liabilities increase such that changes RA/(1+RA)=changes RL/(1+RL)=0.0075 Calculate the changes in the value of assets and liabilities and the new value of the assets and liabilities for Bank one