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 match maturities on an expected basis.

Question

Quizplus · Accepted Answer

This statement is true because there is always some uncertainty about the exact lives of assets, such as unexpected events that could impact their maturity or life span. As a result, it is not always possible to precisely match maturities in an ex post sense, meaning after the fact. However, it is still possible to match maturities on an expected basis, using assumptions and estimates of the asset's likely lifespan.

Uncertainty About the Exact Lives of Assets Prevents Precise Maturity