Euro banks borrow for short maturities and lend for longer maturities. They can reduce the interest risk
Question:
(a) Extending fixed-rate loans.
(b) Extending floating-rate loans.
(c) Extending revolving loans.
(d) Shorting forward forwards (that is, getting a forward contract on a loan, not on a deposit).
(e) Shorting in FRAs.
(f) Going long euro currency futures.
(g) Buying forward the currency in question.
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Related Book For
International Finance Putting Theory Into Practice
ISBN: 978-0691136677
1st edition
Authors: Piet Sercu
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