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Anettt [7]
3 years ago
6

when banker expects a rise in interest rates in the fututre then the best strategy for the present is

Business
1 answer:
oksano4ka [1.4K]3 years ago
7 0

Answer:

Increase duration of the bank assets

Explanation:

Because When the duration of assets is longer than the duration of liabilities, this allows for a the duration gap is positive. And so even if interest rates rise, assets will lose more value than liabilities, hence reducing the value of the firm's equity.

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