This is all the information on the question:

Check my work 5 A financial institution has the following market value balance sheet structure: Assets 3 points Cash Bond $ 2,000 10,400 $ 12,400 Liabilities and Equity Certificate of deposit Equity Total liabilities and equity $ 11,000 1,400 $ 12,400 Total assets eBook References a. The bond has a 10-year maturity, a fixed-rate coupon of 11 percent paid at the end of each year, and a par value of $10,400. The certificate of deposit has a 1-year maturity and a 4 percent fixed rate of interest. The Fl expects no additional asset growth. What will be the net interest income (NII) at the end of the first year? (Note: Net interest income equals interest income minus interest expense.) b. If at the end of year 1 market interest rates have increased 100 basis points (1 percent), what will be the net interest income for the second year? Is the change in NII caused by reinvestment risk or refinancing risk? c. Assuming that market interest rates increase 1 percent, the bond will have a value of $9,846 at the end of year 1. What will be the market value of the equity for the Fi? Assume that all of the Nil in part (a) is used to cover operating expenses or is distributed as dividends. d. If market interest rates had decreased 100 basis points by the end of year 1, would the market value of equity be higher or lower than $1,400? e. What factor has caused the changes in operating performance and market value for this FI