Which of the Following Would Require a Short Hedge

question 21

Multiple Choice

Which of the following would require a short hedge?

• A)The bank has a positive gap in three months.
• B)The bank anticipates receiving the repayment of a $30 million loan in 2 months.The funds will be rolled over immediately.
• C)The bank is going to invest a large amount of money in Treasury bills.
• D)The bank has a negative duration gap.
• E)The bank plans to roll variable-rate CDs over into fixed-rate CDs.

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Definitions:

International Technology

Technology that is globally integrated or utilized around the world, often implying technological cooperation across countries.

Cotton Industry

Refers to the sector of the economy concerned with the production, processing, and distribution of cotton as a raw material.

Sewing Industry

A sector of the economy that involves the production of clothing, textiles, and related goods, often employing manual labor and sewing machines.

Water Power

The energy derived from flowing or falling water, traditionally used for mechanical tasks, like grinding grain, and now for generating electricity.