A) Explain the Purpose of Defense Mechanisms

question 62

Essay

A) Explain the purpose of defense mechanisms.
B) Pick two defense mechanisms,define,and provide an example of each.

---

Definitions:

Maturity Matching

A financial strategy that involves matching the duration of assets and liabilities to mitigate risk.

Financing

The act of supplying capital for enterprise operations, acquisitions, or investment purposes.

Duration

A measure of the sensitivity of the price of a bond or other debt instrument to changes in interest rates, often indicating the bond's price volatility.

Red Herring

In financial contexts, a red herring is a preliminary prospectus filed by a company with the SEC, usually in connection with an initial public offering, containing important information but lacking details on price and offering size.