To decrease asset sensitivity, a bank can:
A) buy longer-term securities.
B) pay premiums on subordinated debt.
C) shorten loan maturities.
D) make fewer fixed rate loans.
E) All of the above.

Question

Quizplus · Accepted Answer

By buying longer-term securities, a bank can decrease its asset sensitivity because longer-term securities are less sensitive to interest rate changes compared to shorter-term securities.

To Decrease Asset Sensitivity, a Bank Can