The following table contains the balance sheet of a given bank:

Assets			Liabilities and capital
	Amount (mil pounds)	Duration (years)		Amount (mil pounds)	Duration (years)
Reserves	2	0	Deposits	41	1.8
OECD gov bonds	22	1.8	Long term debt	12	4.1
Commercial loans	59	4.6	Equity	30
TOTAL	83		TOTAL	83

Answer the following questions:

1. Define the concept of duration.
2. Calculate the duration of assets and liabilities and the duration gap.

c.What is the impact in the value of equity of a change in interest rate from 1% to 1.25%?