Question
Assume that a bank obtains most of its funds from large CDs with a one year maturity. Its assets are in the form of loans
Assume that a bank obtains most of its funds from large CDs with a one year maturity. Its assets are in the form of loans with rates that adjust every six months. The bank would be _______ affected if interest rates increase. To partially hedge its position, it could _______ futures contracts.
adversely; purchase
favorably; sell
favorably; purchase
adversely; sell
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Get StartedRecommended Textbook for
Investments Analysis and Management
Authors: Charles P. Jones
12th edition
978-1118475904, 1118475909, 1118363299, 978-1118363294
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