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Posted on Jul 20, 2024

In each of the following cases, identify what direction of interest rate risk the manager of HRB Bank faces (ie rising or falling interest rates).

(i) HRB bank plans to issue CDs in three months. (ii) HRB plans to buy bonds in two months. (iii) The bank plans to sell Treasury securities next month. (iv) HRB has assets with duration of 4 years and liabilities with duration of 6 years.

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