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A bank attempts to minimize the potential impact on its profit due to a forecast drop in interest rate. It currently has more rate-sensitive assets

A bank attempts to minimize the potential impact on its profit due to a forecast drop in interest rate. It currently has more rate-sensitive assets than rate-sensitive liabilities. Which of the following strategies is best

borrow overnight loans from the Fed Funds market and invest them in T-bills

buy T-bills using excess reserves

borrow fixed rate debt and invest the proceeds in T-bills

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