"Matching the Book" or Trying to Match the Maturities of Assets

question 16

Multiple Choice

"Matching the book" or trying to match the maturities of assets and liabilities is intended to protect the FI from

• A)liquidity risk.
• B)interest rate risk.
• C)credit risk.
• D)foreign exchange risk.
• E)off-balance-sheet risk.

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Definitions:

Interest Paid

The amount of money paid by a borrower to a lender in return for the use of borrowed money.

Short-term Note Payable

A debt obligation payable within a short period, typically one year or less, representing borrowed funds that need to be repaid.

Accounting Issues

Challenges and considerations in the field of accounting, including standards, practices, and the handling of specific financial situations.

Times Interest Earned

A financial ratio that measures the ability of a business to meet its interest payments based on current earnings.