Economics · Financial Risk Management
Which statement concerning the interest rate risk management method of 'smoothing' is true?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Full financial benefit is guaranteed whenever interest rates decline sharply
- 2Fixed assets are always financed using purely equity capital
- 3Interest rate risk is eliminated completely without any remaining exposure
- 4The debt portfolio consists of a balanced mix of fixed and floating rate debt✓
Correct answer
The debt portfolio consists of a balanced mix of fixed and floating rate debt
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