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36 If a bank has an Income Gap of -$10 million, it can reduce its interest-rate risk by paying a fixed rate on $10 million
36
- If a bank has an Income Gap of -$10 million, it can reduce its interest-rate risk by
- paying a fixed rate on $10 million and receiving a floating rate on $10 million.
- paying a floating rate on $10 million and receiving a fixed rate on $10 million.
- selling $20 million fixed-rate assets.
- buying $20 million fixed-rate assets.
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