QUESTION 17 A financial institution has the following market value balance sheet structure: Assets Cash $ 2,000 Liabilities and Equity Certificate of $ 11,000 deposit Equity 2,500 Total liabilities $ 13,500 and equity Bond 11,500 Total $ 13,500 assets The bond has a 5-year maturity, a fixed-rate coupon of 6.5 percent paid at the end of each year, and a par value of $10,000. The certificate of deposit has a 1-year maturity and a 5 percent fixed rate of interest. The Fl expects no additional asset growth. a. What will the Nil for this bank be for year 1? b. Assume market interest rates increase by 75bp at the end of year 1, but all else stays constant. What will the Nll for this bank be in year 2? c. Assuming the same 75bp increase in market rates from part B, at the end of year 1 what will be market value of the equity for the Fl at the beginning of year 2? Assume that all of the NII generated is used to cover operating expenses or is distributed as dividends. Round to the nearest dollar