Question: 8*. Discuss the risks and returns associated with using liability management to meet liquidity needs. (a) Suppose the manager of a DI's liquid assets portfolio

8*. Discuss the risks and returns associated with using liability management to meet liquidity needs. (a) Suppose the manager of a DI's liquid assets portfolio anticipates that interest rates will rise over the next few years. How might this manager structure the liquid assets portfolio to take advantage of this situation? (b) What factors should the manager take into consideration before implementing any strategies you have recommended in part (a)?

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