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Northern Rock Bank has long-term fixed-interest-rate assets that are funded with short-term interest-rate-sensitive liabilities. What can Northern Rock do to limit their interest rate risk?

Northern Rock Bank has long-term fixed-interest-rate assets that are funded with short-term interest-rate-sensitive liabilities. What can Northern Rock do to limit their interest rate risk?

A. Buy a cap.

B. Buy an interest rate swap.

C. Buy a floor.

D. Sell an interest rate swap.

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