Rose, Chapter 7: Risk management for Changing Interest Rates: Asset-Liability Management and Duration Techniques Practice Question set covers the following learning objectives:
* Discuss how asset-liability management strategies can help a bank hedge against interest rate risk.
* Describe interest-sensitive gap management and apply this strategy to maximize a bank’s net interest margin.
* Describe duration gap management and apply this strategy to protect a bank’s net worth.
* Discuss the limitations of interest-sensitive gap management and duration gap management.
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