What type of risk focuses upon mismatched asset and liability maturities and durations?

Question

Quizplus · Accepted Answer

Interest rate risk focuses on the potential loss that may arise due to fluctuations in interest rates. It includes the risk of mismatched asset and liability maturities and durations which can result in significant losses. Liquidity risk relates to the inability to meet short-term funding needs, credit risk refers to the risk of default by counterparties, and foreign exchange rate risk pertains to potential losses due to unfavorable movements in exchange rates.

What Type of Risk Focuses Upon Mismatched Asset and Liability