25. If the Friendly Finance Company raises an addi- tional $20 million with commercial paper and uses

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25. If the Friendly Finance Company raises an addi- tional $20 million with commercial paper and uses the funds to make $20 million of consumer loans that mature in less than one year, what happens to its interest-rate risk? In this situation, what addi- tional changes could it make in its balance sheet to eliminate the income gap?

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Financial Markets and Institutions

ISBN: 978-0321280299

5th edition

Authors: Frederic S. Mishkin, Stanley G. Eakins

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