1. If finance companies have liabilities that are more rate sensitive than their assets and want to reduce interest rate risk, they could
shorten their average asset life.
lengthen their average asset life
shorten the maturity of debt that they issue.
This is all the info the question has.
make greater use of fixed-rate loans.
2. Reserve requirements do not satisfy all of the criteria of a good monetary policy tool because it:
cannot be quickly changed.
is controlled by the U.S. Treasury.
cannot be controlled.
cannot be observed.