1-10 Because the Average Maturity of Assets and the Average

question 28

True/False

1-10 Because the average maturity of assets and the average maturity of liabilities are often different on an FIs balance sheet,the FI is exposed to liquidity risk.

---

Definitions:

Long Run

refers to a period of time in which all factors of production and costs can be fully adjusted, including all forms of investment.

Short Run

A timeframe in economic terms where firms can adjust production levels only by changing variable inputs, with fixed inputs remaining constant.

Long Run

In economics, a period during which all factors of production and costs are variable, allowing for full industry adjustment to change.

Lowest Price

The minimum price at which a product or service is offered in the market.