If a Financial Institution Has 50% of Its Portfolio in a Bond

question 58

Multiple Choice

If a financial institution has 50% of its portfolio in a bond with a five-year duration and 50% of its portfolio in a bond with a seven-year duration,what is the duration of the portfolio?

• A)12 years
• B)7 years
• C)6 years
• D)5 years

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Definitions:

Balance Sheet

A financial statement that displays a company's financial position at a specific point in time, showing assets, liabilities, and equity.

Assets

Resources owned by a company that have economic value and can provide future benefits, such as cash, inventory, and property.

Deferred Revenue

Income a company has received for its products or services but has not yet earned, often considered a liability until the service is provided or product delivered.

Adjusted Trial Balance

a listing of all company accounts that will appear in the financial statements after adjustments have been made for errors, omissions, and accruals.