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Assuming you are told that: The bank's biggest mistake was that it did not recognize that its forecast of a strong local real estate market and...
Assuming you are told that:
"The bank's biggest mistake was that it did not recognize that its forecast of a strong local real estate market and declining interest rates could be wrong."
a. Do you agree or disagree?
b. "Banks still need some degree of interest rate risk to be profitable."
Do you agree or disagree?
c.. "The bank used interest rate swaps so that its spread is no longer exposed to interest rate
movements. However, its loan volume and therefore its profits are still exposed to
interest rate movements."
Do you agree or disagree?
