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Bruce the Bank Manager Can Reduce Interest Rate Risk by ________

question 39

Multiple Choice

Bruce the Bank Manager can reduce interest rate risk by ________ the duration of the bank's assets to increase their rate sensitivity or,alternatively,________ the duration of the bank's liabilities.


Definitions:

Dividend Payout Ratio

The percentage of earnings paid to shareholders in dividends, indicating how much money a company returns to shareholders versus retaining.

Investing Activities

Part of cash flow analysis that involves the purchase or sale of long-term assets and investment securities, reflecting a company's investment growth or reduction.

Net Operating Income

A measure of a company's profitability, calculated by subtracting operating expenses from gross profit.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity level.

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