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Hebert National Bank has a large number of 30-year mortgages with fixed interest rates. Hebert National Bank obtains its funds by continuously issuing 3-year certificates
Hebert National Bank has a large number of 30-year mortgages with fixed interest rates. Hebert National Bank obtains its funds by continuously issuing 3-year certificates of deposit. that the current yield curve is sharply downward sloping. Based on this information, explain how Hebert National Bank is exposed to interest rate risk. Is the steep downward sloping yield curve good news or bad news for HNB? Why?
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