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A commercial bank sells bank bill futures contracts. In which of the following cases would this measure be effective in hedging the bank's exposure to

A commercial bank sells bank bill futures contracts. In which of the following cases would this measure be effective in hedging the bank's exposure to interest rate risk?

  • The bank advances variable rate loans financed by variable rate deposits.

  • The bank provides fixed rate loans financed by variable rate deposits.

  • The bank provides loans in foreign currency financed by domestic deposits.

  • The bank advances fixed rate loans financed by fixed rate deposits.

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