An FI with DA > KDL Could Do Which of the Following

question 52

Multiple Choice

An FI with DA > kDL could do which of the following to reduce the duration gap?

• A)Engage in a swap and pay a variable rate and receive a fixed rate of interest
• B)Sell bond futures contracts
• C)Buy bonds forward
• D)Buy bond call options
• E)None of the options are correct.

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Definitions:

Point

A precise location or position in a geometric space, not having any dimension.

Equation

A mathematical statement that asserts the equality of two expressions, signified by the symbol =.

Center

In geometry, the midpoint or origin point of a shape or object, often relevant in circles, ellipses, and other symmetrical shapes.

Center

The point that is equally distant from all points on the circumference of a circle or sphere.