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Question
If a US bank has variable-rate assets in US dollars and fixed-rate liabilities in Euros, the bank is exposed to
A. interest rate increases and an appreciation of the dollar.
B. interest rate declines and an appreciation of the dollar.
C. interest rate increases and a depreciation of the dollar.
D. interest rate declines and a depreciation of the dollar.
E. zero exposure to interest rate and exchange rate exposures.
Answer
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