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You have asked a question with multiple sub parts, in the same post. I have addressed the first four. Please post the balance sub parts

You have asked a question with multiple sub parts, in the same post. I have addressed the first four. Please post the balance sub parts separately.
Part (a)
Weighted average maturity of the assets of Gunnison = MA =[Maturity of 2 year Treasury note x Value of two year treasury note + Maturity of 15 year munis x Value of Munis]/ Total assets =[2 x
165]/ $ 340=8.31 years
Part (b)
ML =[Maturity of 1 year commercial paper x Value of commercial paper + Maturity of 5 year note x Value of 5 year note]/(Value of commercial Paper + Value fo 5 year note)=[1 x
160]/(
160)=3.17 years
Part (c)
MGAP = MA - ML =8.31-3.17=5.14 years
Part (d)
Since there is a maturity gap, Gunnison Insurance is exposed to interest rate risk. The average maturity of the assets is greater than that of the liabilities. Hence,
If interest rates rise, the decline in the value of assets will be more than that in the value of liabilities and hence net worth (= Assets - Liabilities) will decline.
If interest rates fall, the increase in value of assets will be more than that in the value of liabilities and hence net worth (= Assets - Liabilities) will increase.

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