If the Duration of All Banks Assets with a Maturity

question 19

True/False

If the duration of all banks assets with a maturity of greater than one year is similar to that of its liabilities with a maturity greater than one year, , interest rate risk is nonexistent.

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Definitions:

Heuristics

Mental shortcuts or rules of thumb that simplify decision making, often utilized when facing complex problems or incomplete information.

Reasoning

The mental activity of transforming information to reach conclusions.

Confirmation Bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses.

Endowment Effect

The cognitive bias causing individuals to ascribe higher value to things merely because they own them.