Question: 5. Which of the following is an appropriate change to make on a banks balance sheet when GAP is negative, spread is expected to remain

5. Which of the following is an appropriate change to make on a bank’s balance sheet when GAP is negative, spread is expected to remain unchanged, and interest rates are expected to rise? (LG 22-1)

a. Replace fixed-rate loans with rate-sensitive loans.

b. Replace marketable securities with fixed-rate loans.

c. Replace fixed-rate CDs with rate-sensitive CDs.

d. Replace equity with demand deposits.

e. Replace marketable securities with vault cash.

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