Consider a loan with three years to maturity that pays the bank a 9% coupon rate. You estimate that the yield-to-maturity on loans of similar risk is 6%. Finally, assume that the principal of the loan is $3 Million.   (a) Calculate the current market value of the loan assuming the above yield-to-maturity assumption is correct. (b) Calculate the duration of the loan. (c) If the interest rate drops by 0.75%, then use duration to approximate the percentage change of the loan’s price. (d) Calculate the dollar duration of the loan.   Question 2.  (a) Based on the table below, calculate the duration gap for the bank. (b) Estimate the change in equity in absolute and percentage terms if interest rates move from their current level of 4% up to 5.25%.   Instrument Value Duration       Cash 70 0 ARM Mortgages 300 0.15 Fixed Rate Mortgages 200 20 Investments in Securities 100 10       Total Assets 570               Deposits 400 0 Loans from other Banks 100 6 Equity 70 ?