A bank obtains a significant portion of its funds from large CDs with a maturity of 5 years, and most of its assets represent loans with rates that adjust every 6 months. Why would this bank be adversely affected by a decline rather than an increase in interest rates? How should this bank hedge against the possibility of lower interest rates?

Answer rating: 100% (QA)

The banking sectors profitability increases with interest rate hikes Institutions in the banking sec... View the full answer