Risk Management for Changing Interest Rates: Asset-Liability Management and Duration Techniques 

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After completing this reading, you should be able to:
- Discuss how asset-liability management strategies can help a bank hedge against interest rate risk.
- Describe interest-sensitive gap management and apply this strategy to maximize a bank’s net interest margin.
- Describe duration gap management and apply this strategy to protect a bank’s net worth.
- Discuss the limitations of interest-sensitive gap management and duration gap management.