One way that banks can reduce the duration of their asset portfolios is through the use of
A) fixed rate mortgages.
B) adjustable rate mortgages.
C) certificates of deposit.
D) short-term borrowing.
E) none of these.

Question

Quizplus · Accepted Answer

Adjustable rate mortgages help reduce the duration of asset portfolios because their interest rates adjust with market conditions, aligning more closely with short-term interest rate changes.

One Way That Banks Can Reduce the Duration of Their