(1)A bank finances a $10 million, six-year fixed-rate commercial loan by selling one-year certificate of deposit.
(2)An insurance company invests its policy premiums in a long-term municipal bond portfolio.
(3) A French bank sells two-year fixed-rate notes to finance a two-year fixed-rate loan to a British entrepreneur.
(4)A Japanese bank acquires an Austrian bank to facilitate clearing operations.
(5)A bond dealer uses his own equity to buy Mexican debt on the less developed country (LDC) bond market.
(6)A securities firm sells a package of mortgage loans as mortgage-backed securities.
Describe the features of the method you would choose to measure the interest risks identified.
This question was asked on Jun 25, 2010 and answered on Jun 28, 2010.
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