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Question 1A Maturity is claimed to affect interest rate risk towards financial institutions. Which type of interest rate risk will be incurred if the financial

Question 1A

Maturity is claimed to affect interest rate risk towards financial institutions. Which type of interest rate risk will be incurred if the financial institution funds the 3-year loan using a 15-year fixed-rate deposit? Discuss and justify your answer with support.

(Word limit= 400) (15marks)

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