You have been hired as a risk manager for Acorn Savings and Loan. Currently, Acorn's balance sheet is as follows (in millions of dollars) Assets Cash reserves Auto loans Mortgages Total Assets Liabilities 79.8 97.7 101.4 278.9 18.6 297.5 51.2Checking and savings 97.1 Certificates of deposit 149.2 Long-term financing 297.5 Total liabilities Owner's equity Total liabilities and equity When you analyze the duration of loans, you find that the duration of the auto loans is 2.2 years, while the mortgages have a duration of 7.1 years Both the cash reserves and the checking and savings accounts have a zero duration. The CDs have a duration of 1.8 years, and the long-term financina has a 10.1-vear duration a. What is the duration of Acorn's equity? The duration of the assets is years. (Round to two decimal places.) The duration of the liabilities is years. (Round to two decimal places.) The duration of the equity is years. (Round to two decimal places.) b. Suppose Acorn experiences a rash of mortgage prepayments, reducing the size of the mortgage portfolio from $149.2 million to $99.5 lin, and increasing cash reserves to $100.9 million. What is the duration of Acorn's equity now? The duration of the assets is years. (Round to two decimal places.) The duration of the equity is years. (Round to two decimal places.) If interest rates are currently 4% and were to fall to 3%, estimate the approximate change in the value of Acorn's equity. (Assume interest rates are APRs based on monthly compounding.) We would expect the value of Acorn's equity to by approximately 1%. (Round to two decimal places.) c. Suppose that after the prepayments in part (b), but before a change in interest rates, Acorn considers managing its risk by selling mortgages and/or buying 10-year Treasury STRIPS (zero coupon bonds). How many should the firm buy or sell to eliminate its current interest rate risk? (Select from the drop-down menu.) They should 13 million worth of 10-year STRIPS (Round to two decimal places.)