Assume that a bank obtains most of its funds from large CDs with a one-year maturity. Its assets are in the form of loans with rates that adjust every six months. The bank would be ____ affectedif interest rates increase. To partially hedge its position, it could ____ futures contracts.
A) adversely; purchase
B) favorably; sell
C) favorably; purchase
D) adversely; sell
Correct Answer:
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