Your employer has asked you to examine the interest-rate risk of your bank relative to your direct competition. Management is concerned that interest rates will fall by the end of the year and wants to see what would happen to the relative profitability of the firm if the decline actually occurs.

Interest-rate risk depends on each bank's relative position of interest-sensitive assets and liabilities. You begin the analysis by collecting the information and estimates.

To prepare your presentation for the bank officers, you anticipate and answer the following questions:

i. What is the total for interest rate sensitive assets for

a. Firm

b. Competition

ii. What is the total interest rate sensitive liabilities for:

a. Your firm

b. Competition

iii. using the Macaulay concept of duration, calculated the weighted duration of each asset and liability for both your firm and your competition

iv. What is the average duration for

a. assets for your firm

b. Assets for your competition

c. Liabilities for your firm

d. Liabilities for your competition

v. What i the duration gap

a. for your firm

b. for your competition