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Market interest rates are expected to increase and your banks asset-liability managers expect to liquidate a portion of their bond portfolio to meet customer demands
Market interest rates are expected to increase and your banks asset-liability managers expect to liquidate a portion of their bond portfolio to meet customer demands for funds in the next three months. What kind of a hedge would be called for in this situation?
- Call option.
- An interest rate floor.
- A put option.
- An interest rate collar.
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