A commercial bank (who invests on financial assets and maintains debt from depositors as well) recognizes that its net i

[answerhappygod]

A Commercial Bank Who Invests On Financial Assets And Maintains Debt From Depositors As Well Recognizes That Its Net I 1 (35.35 KiB) Viewed 26 times

A commercial bank (who invests on financial assets and maintains debt from depositors as well) recognizes that its net income suffers whenever interest rates increase. Which of the following strategies would protect the bank against rising interest rates? Buying inverse floaters (bonds). Entering into an interest rate swap where the bank receives a fixed payment stream, and in return agrees to make payments that float with market interest rates. Purchase principal only (PO) strips that decline in value whenever interest rates rise. Enter into a short hedge where the bank agrees to sell interest rate futures. 1 point