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Consider a bank that would like to correct a missmatch between its assets and liabilities. The deposit accounts are in fixed terms and the loans
Consider a bank that would like to correct a missmatch between its assets and liabilities. The deposit accounts are in fixed terms and the loans are mainly on floating interest rate terms. Which instrument would be beneficial for the bank?
A) converting a liability with a floating for fixed swap
B) fixed for fixed currency swap
C) converting an asset with a floating for fixed swap
D) short put options
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