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An FI that finances 3-year variable rate commercial loans with 20 year bonds are exposed to: a. increases in net interest income when interest rates

An FI that finances 3-year variable rate commercial loans with 20 year bonds are exposed to:

a. increases in net interest income when interest rates fall

b. decreases in net interest income when interest rates fall

c. decreases in interest expense when interest rates increase

d. increases in interest expense when interest rates increase

e. no effect on net interest income

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