An FI Is Exposed to Liquidity Risk Because the Average

question 45

True/False

An FI is exposed to liquidity risk because the average maturity of assets and the average maturity of liabilities are often different on the FIs balance sheet.

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Definitions:

Unit Selling Price

The price for which a single unit of a product is sold, not including any additional fees or charges.

Fixed Costs

Expenses that do not change in response to the level of goods or services produced by the business, such as rent or salaries.

Operating Income

Represents the amount of profit realized from a business's operations, after deducting operating expenses such as wages, depreciation, and cost of goods sold from gross revenue.

Unit Selling Price

The price at which a single unit of a product is sold to customers.