"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:

Casualty Insurance

Insurance coverage for loss or liability stemming from a sudden, accidental event.

Equity Securities

Financial assets representing ownership interest in a company, such as stocks, which provide income through dividends and potential for capital gain.

Home Ownership

Home ownership refers to holding the title to a residential property, giving the owner the right to use, occupy, and modify it as they see fit, subject to legal restrictions.

Rental Rates

The cost of leasing a particular property, often expressed as a price per square foot or a monthly fee.