ZED Bank Plc targets the market value of shareholders$$ equity to manage its interest rate risk. The table below provides information on its assets and liabilities for the period ended $31$ December $2019$:

Assets Amount $(000)$ Rate $(\%)$ Duration

Cash $33,00000$

Bonds $122,0007\mathrm{.}21\mathrm{.}8$ Years

Commercial loans $385,00011\mathrm{.}01\mathrm{.}5$ Years

Total $540,000$

Liabilities & Equity

Small time deposits $140,0003\mathrm{.}64\mathrm{.}0$ Years

Large CDs $80,0006\mathrm{.}31\mathrm{.}0$ Years

Transactions account $260,0002\mathrm{.}83\mathrm{.}3$ Years

Equity $60,000$

Total $540,000$

Required:

A$.$ Use the information in the table to calculate the bank$$s duration gap. Is this bank positioned to gain or lose if interest rates rise?

B$.$ Estimate the change in market value of equity if all market interest rates fall by an average of $1\mathrm{.}5$ percent.

C$.$ Provide a specific transaction that the bank could implement to immunize its interest rate risk. The transaction may be a new asset funded by a new liability or an asset sale and the simultaneous purchase of another asset.