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After Conducting a Rate-Sensitive Analysis,a Bank Finds Itself with the Following

Question 41

Multiple Choice

After conducting a rate-sensitive analysis,a bank finds itself with the following amounts of rate-sensitive assets and liabilities (RSAs and RSL) and fixed-rate assets and liabilities (FRAs and FRLs) ; the rate of return and cost rates on the accounts are also given: After conducting a rate-sensitive analysis,a bank finds itself with the following amounts of rate-sensitive assets and liabilities (RSAs and RSL) and fixed-rate assets and liabilities (FRAs and FRLs) ; the rate of return and cost rates on the accounts are also given:   If the bank wishes to set up a swap to totally hedge the interest rate risk,the bank should A) pay a variable rate of interest and receive a fixed rate of interest. B) pay a fixed rate of interest and receive a variable rate of interest. C) pay a variable rate of interest and receive a variable rate of interest. D) pay a fixed rate of interest and receive a fixed rate of interest. If the bank wishes to set up a swap to totally hedge the interest rate risk,the bank should


A) pay a variable rate of interest and receive a fixed rate of interest.
B) pay a fixed rate of interest and receive a variable rate of interest.
C) pay a variable rate of interest and receive a variable rate of interest.
D) pay a fixed rate of interest and receive a fixed rate of interest.

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