Question: 3.a) Why is it important for a bank to determine the amount of interest sensitive assets and interest sensitive liabilities relative to fixed interest rate

3.a) Why is it important for a bank to determine the amount of interest sensitive assets and

interest sensitive liabilities relative to fixed interest rate assets and fixed interest rate

liabilities?

b) How does a bank manage its interest sensitive and insensitive assets and liabilities in

order to reduce risk?

****If you could please provide a full explanation, that would be very much appreciated. Thank you.******

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