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You work for a bank and a customer comes in with the following problem. The customer has lent $1 million for 10 years with a

You work for a bank and a customer comes in with the following problem. The customer has lent $1 million for 10 years with a fixed interest rate. The customer financed the loan by borrowing with 1-year commercial paper. 



What interest rate risk is the customer exposed to and what product would you recommend to hedge this risk? How would this product protect the customer?

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