Suppose that a banks alco reports that the bank is too


Suppose that a bank's ALCO reports that the bank is too liability sensitive; that is, earnings will fall more than desired should rates rise. You have been asked to reduce the bank's earnings sensitivity. What specific strategies might the investment manager pursue? Identify the cost and benefit of each. Is each an active or passive strategy and is it speculative?

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Financial Management: Suppose that a banks alco reports that the bank is too
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