Maturity mismatch

Definition:

In the context of hedging, maturity mismatch arises when a hedging instrument does not match the maturity of the underlying assets thus creating an imperfect hedge. In the context of balance sheets, maturity mismatch arises when there are more short-term liabilities than short-term assets to cover the liabilities with.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

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Currency Exchange Risk

Uncertainty about the rate at which revenues or costs denominated in one currency can be converted into another currency.

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