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A U.S. bank borrowed dollars, converted them to euros, and invested them in euro denominated CDs to take advantage of interest rate differentials. Has this
A U.S. bank borrowed dollars, converted them to euros, and invested them in euro denominated CDs to take advantage of interest rate differentials. Has this transaction created an additional risk (other than bank failure) to this U.S. bank? If yes, what is that risk and what action should this bank take to cover that risk?
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