The following balance sheet information is available (amounts in thousands of dollars and duration in years) for a financial institution:

Amount Duration

Assets:

T-notes 60 0.85

T-bonds 170 4.00

Loans 2,724 7.00

Liabilities and Equity:

Deposits 2,092 1.00

Federal funds 232 0.01

Equity 630

Required:

a) What is the average duration of all the assets? (5 marks)

b) What is the average duration of all the liabilities? (5 marks)

c) What is the leverage adjusted duration gap? (5 marks)