Use the following information about a hypothetical government securities dealer to answer the questions below:
Assets Liabilities
$150 million 30 day TB $575 million 14 day repos
$275 million 91 day TB $290 million 1 year commercial paper
$350 million 2 year Treasury notes
$90 million 180 day municipal notes
=865
Calculate the dealer's maturity gap. Assume 360 days in a year.
How can the dealer reduce the interest rate exposure of its portfolio? Be specific.