1. How do financial institutions manage interest rate risk arising from mismatches in the repricing profiles of their assets and liabilities, and what hedging strategies, such as duration matching, convexity hedging, and interest rate swaps, do they employ to mitigate the impact of interest rate fluctuations on their net interest margins ?

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Financial institutions manage interest rate risk which arises from mismatches in the repricing profiles of their assets and liabilities through various hedging strategies to mitigate the impact of int... View the full answer