Uncertainty about the exact lives of assets prevents precise maturity matching in an ex post (i.e., after the fact) sense even though it is possible to maturity match on an expected basis.

Question

Quizplus · Accepted Answer

The statement is true. Since the exact lives of assets cannot be predicted with certainty, it is not possible to precisely match their maturity after the fact. However, maturity matching can still be done based on expected lives of assets.

Uncertainty About the Exact Lives of Assets Prevents Precise Maturity