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A Bank That Uses a Short Hedge Is Most Likely

Question 95

Multiple Choice

A bank that uses a short hedge is most likely:


A) trying to avoid higher borrowing costs.
B) trying to avoid declining asset values.
C) trying to avoid lower than expected yields from loans and securities.
D) trying to avoid higher borrowing costs or trying to avoid declining asset values.
E) trying to offset a negative duration gap.

Correct Answer:

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