The Principle of Matched Maturities in Finance Refers To

question 55

Multiple Choice

The principle of matched maturities in finance refers to:

• A) finding sources of funds with the longest maturity, in order to avoid liquidity crises.
• B) funding long-term assets with long-term sources and short-term assets with short-term financing.
• C) using as much short-term financing as possible due to the lower cost of interest.
• D) buying marketable securities when demand is high and borrowing short-term when demand is low.

---

Definitions:

Mania

A mental state characterized by extremely elevated mood, energy, unusual thought patterns, and sometimes psychosis.

Delusional Schemes

Intricate beliefs or plans based on false judgments or interpretations, typically seen in psychiatric conditions.

Speak Rapidly

The act of talking quickly, which can be a symptom of nervousness, excitement, or conditions like mania.

Flight of Ideas

A rapid and continuous shifting of ideas and thoughts, often seen in manic episodes of bipolar disorder.