Question
A bank has just completed an internal stress test and finds that it has a repricing risk of -0.5% to its cash flow for every
A bank has just completed an internal stress test and finds that it has a repricing risk of -0.5% to its cash flow for every 1% upward shift in interest rates. What should the bank do to mitigate its risk?
It should securitize and sell its loan portfolio, retaining only the servicing rights.
It should become a counterparty to a currency swap.
It should sell some of its real estate assets.
It should issue more stock to bolster capital reserves.
It should become a counterparty to an interest rate swap.
Either a or e.
Either a, c, d, or e.
All of these are viable.
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