The numbers provided are in thousands of dollars. All securities are selling at par.

Treasury bill $ $90$ Time deposits $$1,100$

Treasury notes $ $55$ Fed funds sold $ $230$

Treasury bonds $ $176$ Demand deposits $$2,500$

Loans $$4,679$ Equity $$1,170$

Notes: All Treasury bills have six months until maturity. One$-$year Treasury notes are priced at par and have a coupon of $7$ percent paid semiannually. Treasury bonds have an average duration of $4\mathrm{.}5$ years and the loan portfolio has a duration of $7$ years. Time deposits have a $1-$year duration and the Fed funds duration is $\mathrm{.}003$ years.

If relative change in all market interest rates is an increase of $\mathrm{.}5\%,$ calculate the impact on the bank's market value of equity using the duration approximation. $($That is$,$

$\backslash$Delta

R$/(1+$R$)=\mathrm{.}5\%$ percent$)$

a$.$ The bank's market value of equity increases by $$155,580.$

b$.$ The bank's market value of equity decreases by $$155,580.$

c$.$ The bank's market value of equity increases by $$162,695.$

d$.$ The bank's market value of equity decreases by $$162,695.$

e$.$ There is no change in the bank's market value of equity.