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Question
Which of the following best describes maturity mismatch and its role in bank operations?
a) It refers to banks selling old loans so they can take on new loans, which earns a capital gain.
b) It refers to banks lending for the long term and borrowing for the short term, which earns positive net interest income.
c) It refers to the outdated accounting rules that most banks must operate under.
d) It refers to the inequality between accounting allowances for bad loans and the actual rate of losses on those loans.
Answer
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Related questions
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