Question: The most typical interest-rate hedging problem financial institutions face is: a. Avoiding a fall in borrowing costs. b. Avoiding interest-sensitive assets equaling interest-sensitive liabilities. c.

The most typical interest-rate hedging problem financial institutions face is:

a. Avoiding a fall in borrowing costs.

b. Avoiding interest-sensitive assets equaling interest-sensitive liabilities.

c. Avoiding decrease in net interest income resulting from movements in market interest rates.

d. Avoiding a fall in interest returns expected from loans and security holdings.

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