The use of floating-rate debt will not entirely eliminate a bank's exposure to interest rate risk because
A) the value of the bank's assets will still be affected more than the value of the bank's liabilities by changes in interest rates.
B) the value of the bank's liabilities will still be affected more than the value of the bank's assets by changes in interest rates.
C) a rise in interest rates might increase the default risk of borrowers.
D) Federal Reserve regulations limit the amount of floating-rate debt a bank may have.
Correct Answer:
Verified
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