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Matched Funding by Banks

Question 57

Multiple Choice

Matched funding by banks:


A) is a form of Macro hedging.
B) requires using instruments of risk management,such as financial futures,options on financial futures and interest rate swaps to reduce the interest rate risk of the firm's entire balance sheet.
C) happens if for instance fixed-rate loans are funded with fixed rate deposits or fixed rate borrowed funds of the same maturity.
D) is achieved when banks borrows short and lend long.

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