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How do you interpret the position of an FI with a negative on-balance-sheet gap and a positive off-balance-sheet gap? A. The FI uses its on-balance-sheet

How do you interpret the position of an FI with a negative on-balance-sheet gap and a positive off-balance-sheet gap?

A. The FI uses its on-balance-sheet activities to hedge its off-balance-sheet activities.

B. The FI uses its off-balance-sheet activities to hedge its on-balance-sheet activities.

C. The FI believes that interest rates will decrease and made a mistake in setting its gap for off-balance-sheet activities.

D. The FI believes that interest rates will decrease and made a mistake in setting its gap for on-balance-sheet activities.

(please explain carefully each of the answers)

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