Because the Average Maturity of Assets and the Average Maturity

question 10

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

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Definitions:

Renewal

The process of making something valid for an additional period or restoring it to a fresh condition.

Buyer in the Ordinary Course of Business

A term that describes a purchaser who buys goods in good faith from a seller who routinely deals in such goods, without knowledge that the sale violates the rights of a third party.

Good Faith

Honesty in fact.

Goods

All physically existing things that are movable at the time of identification to the contract for sale.