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Free_Kalibri [48]
3 years ago
14

If Second National Bank has more rate-sensitive liabilities than rate-sensitive assets, it can reduce interest-rate risk with a

swap which requires Second National to_____________.
Business
1 answer:
Contact [7]3 years ago
3 0

Answer: Pay fixed rate while receiving floating rate.

     

Explanation:

  According to the given question, If the second national bank contain more rate of liabilities as compared to the rate of asset in any organization then it basically reducing the risk of the interest rate by using the technique swapping with paying some fixed amount of rate at the time of receiving the floating rate.

The process of fixed to floating swap is one of the contractual process between any two types of companies or members so that they can swap their cash flow system.  

 Therefore, The given answer is correct.  

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