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A liability-sensitive financial institution will typically hedge its position to avoid lower net interest income by: Using an interest rate floor. Executing a long hedge.
A liability-sensitive financial institution will typically hedge its position to avoid lower net interest income by:
- Using an interest rate floor.
- Executing a long hedge.
- Using an interest rate collar.
- Executing a put option
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International Financial Management
Authors: Jeff Madura
2nd Edition
0314430296, 978-0314430298
