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The Bank of Munich has decided to manage its interest rate risk by hedging. Given the bank's decision, which of the following must be TRUE?

The Bank of Munich has decided to manage its interest rate risk by hedging. Given the bank's decision, which of the following must be TRUE?

The bank's duration gap is positive and it expects interest rates to increase.

The bank's gap is negative and it expects interest rates to decrease.

The bank's duration gap is negative and it expects interest rates to increase.

The bank's gap is positive and it expects interest rates to increase.

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