An FI with a Positive Duration Gap Is Exposed to Interest

question 24

True/False

An FI with a positive duration gap is exposed to interest rate declines and could hedge its interest rate risk by buying forward contracts.

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Definitions:

Emotional Intelligence

The capacity to be aware of, control, and express one's emotions, and to handle interpersonal relationships judiciously and empathetically.

Self-Indulgence

The act of allowing oneself to enjoy or consume something excessively, often without restraint or consideration for consequences.

Conflict Resolution

Techniques and strategies used to address and resolve disagreements and disputes in a constructive manner.

Paraphrase

The act of rewording or rephrasing text or speech to achieve clearer understanding, often with different words but maintaining the original meaning.