If the Average Maturity of Assets Is 4 Years and the Average

question 2

True/False

If the average maturity of assets is 4 years and the average maturity of liabilities is 4 years, then the FI has no interest rate risk exposure.

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Definitions:

Expense Recognition Principle

An accounting principle that matches expenses with revenues in the period in which they're incurred to produce those revenues.

Service

The action of helping or doing work for someone, often refers to non-tangible products offered by businesses.

T-account

The basic form of an account.

Constructed

Refers to anything that has been built or formed, usually pertaining to buildings, infrastructure, or other physical structures.