The thrift institutions' principal problem as described in the textbook is:
A) Too many rate sensitivities
B) Portfolio maturity mismatch
C) Competition
D) The rise of credit unions
E) None of the above

Question

Quizplus · Accepted Answer

Portfolio maturity mismatch is a principal problem for thrift institutions, as they often fund long-term loans, such as mortgages, with short-term deposits, leading to interest rate and liquidity risks.

The Thrift Institutions' Principal Problem as Described in the Textbook