The book value of DRAGON SLAYER BANKs balance sheet is listed below. The current market yield for the securities is in parentheses. The amounts are in millions.

Cash	55	Demand deposits	100
6 month T-bills (4.25%)	50	Savings accounts (2.0%)	205
2 year personal fixed rate loan at 6.50%	100	3 month CDs (2.50%)	150
3 year T bills (4.85%)	100	9 months CDs (3.85%)	350
3 year 5.5% semi-annual coupon T-notes (5.25%)	90	1 year term deposit (4.0%)	540
5 year 6.2% semi-annual coupon T-notes (5.75%)	100	3 year term deposits (4.30%)	230
5 year personal loan (11.5%, repriced yearly)	350
5 year bond 8.0% annual coupon issued by Thailand government with rating credit rating BBB	150	5-year bonds at 6.75% semiannual interest, balloon payment	200
		20-year bonds at 7.5% interest, balloon payment	250
10 year commercial loan (12.25% repriced @ 6 months)	700	Subordinate notes:
15-year commercial loan at 10% interest (repriced monthly)	230	3-year fixed rate (5.65%)	290
20-year sovereign bonds 12.0% annual-coupon issued by Vietnamese government with BB rating	150	6-year fixed rate (6.00%)	100
		Ordinary Equity	20
20-year mortgages at 8.5% interest (LVR 80%, no mortgage insurance), balloon payment^	260	Preference shares	10
		Retained Earnings	40
Building	150

Total Assets 2485 Total liability and equity 2485

Required

1. What is the cumulative repricing gap if the planning period is (a) 6 months

(b) 3 year

(1 + 1 marks)

2. What will happen to the net interest income of the bank, if interest on the banks rate sensitive assets is forecasted to decrease by 30 basis points and rate-sensitive liabilities to increase 50 basis points in a year time? (4 marks)
3. Does the bank have sufficient capital to meet the risk adjusted assets requirement as per the Basle III requirement? Please ignore the cyclical buffer requirement (8 marks)