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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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