What could be done to reduce bank a interest rate risk

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Question: Suppose that the Fed wanted to bring down inflation and thus raised interest rates from 2% to 5%. Bank A has $20 million of fixed rate assets, $40 million of rate-sensitive assets, $30 million of fixed rate liabilities, and $15 million of rate-sensitive liabilities. What will happen to Bank A's profits? What could be done to reduce Bank A's interest rate risk?

Reference no: EM133525854

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