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b) As manager of ABC Bank, please calculate and discuss the potential losses if the interest rate is expected to rise by 4% in the

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b) As manager of ABC Bank, please calculate and discuss the potential losses if the interest rate is expected to rise by 4% in the next 3 months given that: Initial capital of bond position = RM980,000 Duration of the bond = 10 Current interest rate = 8% (5 marks) c) Explain how a nave hedge works in favour of ABC Bank. Please discuss

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