Extracted text: The following financial statement is for the current year. From the past, you know that 10% of fixed- rate mortgages prepay each year. You also estimate that 10% of checkable deposits and 20% of savings accounts are rate sensitive. Second National Bank Assets Liabilities ¢ 1,500,000 € 15,000,000 C 5,500,000 C 8,000,000 Reserves Checkable Deposits Securities Money Market Deposits Savings Accounts <1 year="" 1="" to="" 2="" years="" ¢="" 6,000,000="" c="" 8,000,000="" c="" 12,000,000="" cds="" €="" 15,000,000="" €="" 22,000,000="">2 years Variables-rate Residential Mortgages <1 year="" c="" 7,000,000="" ¢="" 13,000,000="" i="" to="" 2="" years=""> 2 years € 5,000,000 ¢ 2,500,000 € 5,000,000 Variables-rate Fixed-rate Commercial Loans Fed Funds C 1,500,000 € 18,500,000 € 30,000,000 ¢ 2,500,000 <1 year="" i="" to="" 2="" years="" borrowings=""><1 year="" i="" to="" 2="" years="" c="" 12,000,000="" ¢="" 3,000,000="" ¢="" 2,000,000="" ¢="" 5,000,000="">2 years >2 years Bank Capital Buildings, etc. Total C100,000,000 Total C100,000,000 a. What is the current Income GAP for Second National Bank? What will happen to the bank’s current net interest income if rates fall by 75 basis points? b. What special assumptions do income and duration gap analyses make about interest rate changes