Because the Average Maturity of Assets and the Average Maturity

question 25

True/False

Because the average maturity of assets and the average maturity of liabilities are often different on an FI's balance sheet, the FI is exposed to liquidity risk.

---

Definitions:

Economic System

The structure and methods by which a society or country organizes and allocates its resources, goods, and services.

Domestication

The process of adapting wild plants or animals for human use, or the adaptation of technology within societal and cultural contexts.

Piety

A quality of being religious or reverent, often characterized by a deep respect for God or devout fulfillment of religious obligations.

Instrumental Reasoning

A method of thinking where the focus is on achieving a specific goal or outcome, often at the expense of ethical considerations.