The Bank used Duration Matching Immunization Strategy. FNC Bank is considering reducing Interest Rate Risk through Swaps. Explain the advantages of Interest Rate Swaps over conventional techniques of Duration Matching and explain how you would proceed?

Item Market Value Duration (years)
Assets
Cash (noninterest bearing) $100 0.0
5-year term loans, valued at par
To yield 10% $400 4.17
10-year amortizing mortgages
Valued at par to yield 10% $500 4.73
Total Assets $1,000

Liabilities and Equity
5-year, floating-rate note with $600 1.00
annual reset to LIBOR; now Albares84%
7-year, zero-coupon bond issued $300 7.00
to yield 8%
Total Liabilities $900
Net worth $100