Asked by Danielle Toone on Apr 29, 2024
Verified
The maturity matching principle says that the maturity of financing should generally match the length of the project it supports.
Maturity Matching Principle
A financial management strategy that involves matching the duration of assets with the duration of liabilities, to manage risk and ensure funding adequacy over time.
Project
A planned set of interrelated tasks to be executed over a fixed period and within certain cost and other limitations.
- Comprehend the importance of maturity matching in financing.
Verified Answer
SW
Sydni WilliamsMay 06, 2024
Final Answer :
True
Explanation :
The maturity matching principle recommends matching the maturity of financing to the duration of the asset or investment being financed. By aligning the two, the risk of refinancing or not being able to meet financial obligations is reduced.
Learning Objectives
- Comprehend the importance of maturity matching in financing.
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