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Question
Bank of the Atlantic has liabilities of $4 million with an average maturity of two years paying interest rates of 4.0 percent annually. It has assets of $5 million with an average maturity of 5 years earning interest rates of 6.0 percent annually.
To what risk is the bank exposed?
A. Reinvestment risk.
B. Refinancing risk.
C. Interest rate risk.
D. Answers A and C only.
E. Answers B and C only.
Answer
This answer is hidden. It contains 239 characters.
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