Questions
25751 Financial Institution Management - Spring 2025 Week 5 Quiz
Single choice
Balance sheet hedging is:
Options
A.Hedging maturities of assets and liabilities.
B.Maximising return by increasing maturity of assets.
C.Using derivatives to eliminate interest rate risk.
D.Impractical because it involves continuous utilisation of off-balance sheet items.
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Step-by-Step Analysis
Question restatement: Balance sheet hedging is:
Option 1: Hedging maturities of assets and liabilities. This option aligns with the standard definition of balance sheet hedging, which focuses on aligning the timing of cash flows from assets and liabilities to mitigate mismatch risk and interest rate exposure on the balanc......Login to view full explanationLog in for full answers
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