In an interest rate swap, a bank whose liabilities are ____ rate sensitive than its assets can swap payments with a ____ interest rate in exchange for payments with a ____ interest rate.

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In an interest rate swap, a bank whose liabilities are more rate sensitive than its assets would want to swap payments with a fixed interest rate in exchange for payments with a variable interest rate. This helps the bank manage the interest rate risk by aligning the sensitivity of its assets and liabilities more closely.

In an Interest Rate Swap, a Bank Whose Liabilities Are