The managers of The Pleasant View Bank asks for a performance$/$risk analysis, and asks you to answer the following questions.

The Bank$$s balance sheet is as follows:

Assets: Ave. Duration

Short$-$term Securities $4\mathrm{.}6\%$ rate $500$ million $1$ year

Long$-$term Loans $7\mathrm{.}50\%$ rate $ $1,000$ million $10$ years

Total Assets $$1,500$ million

Liabilities & Equity

Short$-$term Deposits $2\mathrm{.}30\%$ rate $$750$ million $1$ year

Certificates of Deposit $5\mathrm{.}20\%$ rate $600$ million $4$ years

Total Liabilities $$1,350$ million

Equity $150$ million

Total Liab.& Equity $ $1,500$ million

a$.$ What is the bank$$s expected net interest income $ $($NII$)$ and expected net interest margin $($NIM$)?$

$\{$Hint: NII $=[$Sum $($Each asset x its rate$)][$Sum $($Each liability x its rate$)]\}$

and NIM $=[$NII $/$ Total Assets$]$

NII $($$$$s$)\_\_\_\_\_\_\_\_\_\_\_\_$ NIM $\%\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

b$.$ If the bank has the NIM $\%$ that you calculated above, a PLL$\%$ of $0\mathrm{.}20\%,$ and a Burden $\%$ of $2\mathrm{.}00\%,$ what is the bank$$s operating ROA before taxes $($NIM $$ Burden$\%-$ PLL$\%)?$ Operating ROA $($OROA$)\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

c$.$ What is the equity multiplier $($EM$)$ for the bank? $($hint EM $=$ total assets$/$equity$)$

EM $\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

d$.$ Using this equity multiplier, what is the bank$$s Operating ROE?

$($hint ROE $=$ OROA x EM$)$ Operating ROE $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

e$.$ What is the bank$$s $1-$year income $($funding$)$ gap $($Rate Sensitive Assets $($RSA$)$ for $1$ year $$ Rate Sensitive Liabilities $($RSL$)$ for $1$ year? Funding Gap $\_\_\_\_\_\_\_\_\_\_\_\_$

f$.$ Given this funding gap if rates go up by $1\%,$ what is the expected change in the bank$$s NII $$?[$Hint: Change NII $ $=$ Funding Gap x Change Rate$]$

Expected Change in NII $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$