The following balance sheet information is available (amounts in thousands of dollars and duration in years) for a financial institution: Amount Duration T-bills $90 0.50 T-notes 55 0.90 T-bonds 176 x Loans 2,724 7.00 Deposits 2,092 1.00 Federal funds 238 0.01 Equity 715 Treasury bonds are five-year maturities paying 6 percent semiannually and selling at par. (5 points)

What is the forecasted impact on the market value of equity caused by a relative upward shift in the entire yield curve of 0.5 percent [i.e., R/(1+R) = 0.0050]?

f. If the yield curve shifts downward by 0.25 percent [i.e., R/(1+R) = -0.0025], what is the forecasted impact on the market value of equity?

g. What variables are available to the financial institution to immunize the balance sheet? How much would each variable need to change to get DGAP equal to 0?