answer part c here is other people answer just give some point different with this answer Part C: INTEREST RATE RISK MANAGEMENT ?Yong) They use securities, residential mortgages, and interest rate and foreign exchange derivatives in managing interest rate sensitivity. Interest rate risk management for Non-Trading activities. Bank of America prepare forward-looking forecasts of net interest income. The baseline forecast takes into consideration expected future business growth. They measure and evaluate the impact that alternative interest rate scenarios on the baseline forecast to assess income forecast is frequently updated for any changing assumptions and differing economic trends. Thus, they continually monitor the balance sheet position in an effort to maintain an acceptable level of exposure to interest rate changes. (2013)Securities: The securities portfolio is an integral part of our interest rate risk management, which includes our ALM positioning, and is primarily comprised of debt securities including MBS and to a lesser extent U.S. Treasury, corporate, municipal and other debt securities. As part of the ALM positioning, Bank of America use derivatives to hedge interest rate and duration risk. Residential Mortgage Portfolio Properties and sales. These were partially offset by new origination volume retained on our balance sheet, loans repurchased as part of the FNMA Settlement, as well as repurchases of delinquent loans pursuant to our servicing agreements with GNMA, which is part of our mortgage banking activities. Interest Rate and Foreign Exchange Derivative Contracts Interest rate and foreign exchange derivative contracts are utilized in the ALM activities and serve as an efficient tool to manage bank’s interest rate and foreign exchange risk. The bank use derivatives to hedge the variability in cash flows or changes in fair value on our balance sheet due to interest rate and foreign exchange components.

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