Discuss the Following Proposition: While in Theory Duration Matching Allows

question 18

Essay

Discuss the following proposition: While in theory duration matching allows an FI to immunise against interest rate risk, the reality is that it is too costly and too time consuming to be useful.

---

Definitions:

Voltage

The electric potential difference between two points, which drives the flow of electric current in a circuit.

Current Flow

The movement of electric charge carriers in a conductor or space, typically measured in amperes.

Applied Voltage

The level of electric force applied over a circuit or component, causing current to begin moving.

Total Current

The overall flow of electricity in a circuit, measured in amperes, which is constant throughout a series circuit.