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A financial institution has assets that mature in seven years and liabilities that mature in five years. What type of risk do they face and
A financial institution has assets that mature in seven years and liabilities that mature in five years. What type of risk do they face and what type of change in interest rates will hurt them most?
A. Refinancing risk and they will suffer if interest rates fall B. Refinancing risk and they will suffer if interest rates rise C. Reinvestment risk and they will suffer if interest rates fall D. Reinvestment risk and they will suffer if interest rates rise
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