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:

Subsidy

A financial contribution granted by the government to support or promote economic activities.

Direct Assistance

Support or aid provided directly to individuals, organizations, or countries, often in the form of resources, financing, or services.

Tax Breaks

Financial incentives or discounts in taxation provided by the government to encourage certain activities or investments.

Tariffs

Taxes imposed on imported goods aimed at making them more expensive than similar locally-produced goods to protect domestic industries from foreign competition.