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A Bank Expects Interest Rates to Fall with a Parallel

Question 106

Multiple Choice

A bank expects interest rates to fall with a parallel downward shift in the yield curve. What action should the bank take, if it wants to benefit from this view?


A) increase the maturity of its liabilities
B) reduce the maturity of its asset portfolio
C) runazerogap
D) lengthen the maturity of its asset portfolio

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