If the Average Maturity of Assets Is 5 Years and the Average

question 94

True/False

If the average maturity of assets is 5 years and the average maturity of liabilities is 7 years, then the FI has no interest rate risk exposure.

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Definitions:

Administrative Costs

Expenses related to the general operations of a business, including salaries of senior executives, office supplies, and utilities.

Direct Material

Raw materials that are directly traceable to the manufacturing of a product and are integral to its production.

Direct Labor

The labor costs directly tied to the production of goods or services.

Direct Materials

Raw materials that are directly incorporated into a finished product and can be directly traced to that product.