Repricing gap using a 6-month planning period

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Consider a bank with a positive repricing gap using a 6-month planning period. Choose the most correct statement.

a. If all interest rates are expected to increase, the bank would advise their retail customers to switch from 2-year adjustable-rate loans to 1-year adjustable-rate loans.

b. If all interest rates are expected to decrease, the bank could encourage their customers to switch from 1-month reset floating mortgage loans to 3-year fixed-rate loans at the current rate.

c. If all interest rates are expected to decrease, the bank could encourage their customers to switch from fixed-rate car loans to adjustable-rate ones.

d. If all interest rates are expected to increase, the bank could encourage their customers to switch from three years to 1-year personal loans.

e. None of the above is correct.

Reference no: EM133072576

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