8-32 If the Average Maturity of Assets Is 5 Years

question 68

True/False

8-32 If the average maturity of assets is 5 years and the average maturity of liabilities is 7 years,then the FI has no interest rate risk exposure.

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Definitions:

Days' Sales

Days' sales, often used in the context of days' sales outstanding (DSO), measures the average number of days that a company takes to collect revenue after a sale has been made.

Financial Statements

Structured documentation of financial transactions and status of a company, individual, or different entity.

Vertical Analysis

A method of financial statement analysis in which each entry of the main categories of the financial statements is listed as a percentage of another item.

Gross Profit

The financial gain made after subtracting the cost of goods sold from the total revenue generated from sales.