A commercial bank recognizes that its net income suffers whenever interest rates increase. Which of the following strategies would protect the bank against rising interest rates?
A) buying inverse floaters
B) entering into an interest rate swap where the bank receives a fixed payment stream, and in return agrees to make payments that float with market interest rates
C) entering into a short hedge where the bank agrees to sell interest rate futures
D) selling some of the bank's floating-rate loans and using the proceeds to make fixed-rate loans

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The Answer of A commercial bank recognizes that its net income suffers whenever interest rates increase. Which of the following strategies would protect the bank against rising interest rates?
A) buying inverse floaters
B) entering into an interest rate swap where the bank receives a fixed payment stream, and in return agrees to make payments that float with market interest rates
C) entering into a short hedge where the bank agrees to sell interest rate futures
D) selling some of the bank's floating-rate loans and using the proceeds to make fixed-rate loans

A Commercial Bank Recognizes That Its Net Income Suffers Whenever